BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Fiat money includes physical token like certificates
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Fiat money’s value is not derived from any intrinsic value are relative value is based only on government order
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Fiat money can be converted in to valuable commodity (like gold)
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None of these
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Detailed explanation-1: -Fiat money is a currency that lacks intrinsic value and is established as a legal tender by government regulation. Traditionally, currencies were backed by physical commodities such as silver and gold, but fiat money is based on the creditworthiness of the issuing government.
Detailed explanation-2: -Key Differences Between Fiat and Representative Money While fiat money doesn’t have intrinsic value-through an objective calculation-its value is set by the government that issues the currency.
Detailed explanation-3: -The correct answer is has no intrinsic value. Fiat money is a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed.
Detailed explanation-4: -Answer and Explanation: 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.