ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Examples of commodity money are gold and silver coins. Gold coins were valuable because they could be used in exchange for other goods or services, but also because the gold itself was valued and had other uses. Commodity money gave way to the next stage-representative money.

Detailed explanation-2: -Economists differentiate among three different types of money: commodity money, fiat money, and bank money. Commodity money is a good whose value serves as the value of money. Gold coins are an example of commodity money. In most countries, commodity money has been replaced with fiat money.

Detailed explanation-3: -Payment on the basis of trust but not on the basis of any order of the government is known as fiduciary money; examples are cheques.

Detailed explanation-4: -Fiat, commodity, representative, fiduciary, and commercial bank money are the five distinct forms of money in use today.