BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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fiat money
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commodity money
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non-valued
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all of these
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Detailed explanation-1: -The correct option is C) Legal tender that has no intrinsic value. Fiat money is a legal tender due to the fact that money is printed and backed by the government’s faithfulness.
Detailed explanation-2: -The U.S. Dollar is a fiat currency, but what does that mean? The term “fiat” is a government currency not backed by a physical commodity like gold or silver. Instead, the money has value because the issuing government says it has value.
Detailed explanation-3: -History of Fiat Money in the U.S. The U.S. dollar is considered to be both fiat money and legal tender, accepted for private and public debts. Legal tender is basically any currency that a government declares to be legal.
Detailed explanation-4: -Fiat money is backed by a country’s government instead of a physical commodity or financial instrument. This means most coin and paper currencies that are used throughout the world are fiat money. This includes the U.S. dollar, the British pound, the Indian rupee, and the euro.