ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a fur coat
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diamonds
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gold earrings
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an IOU note
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Detailed explanation-1: -Representative Money Examples. The most familiar examples of representative money today are credit cards and checks.
Detailed explanation-2: -Representative money is a certificate or token that can be exchanged for the underlying commodity. For example, instead of carrying the gold commodity money with you, the gold might have been kept in a bank vault and you might carry a paper certificate that represents-or was “backed"-by the gold in the vault.
Detailed explanation-3: -More specifically, the term representative money has been used variously to mean: A claim on a commodity, for example gold and silver certificates. In this sense it may be called “commodity-backed money". Any type of money that has face value greater than its value as material substance.
Detailed explanation-4: -Representative money, on the other hand, is a form of currency that represents the intent to pay. The most widely used representative money example is a basic cheque. Apart from cheques, there are a few other types of representative money. These include credit cards, money orders and bank drafts.