ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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representative money is worth more than fiat money.
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fiat money is counted in coins; representative money is counted in paper dollars.
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fiat money is more durable than representative money.
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representative money is backed by silver or gold, ; fiat money is not.
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Detailed explanation-1: -Fiat money is money that isn’t backed by a valuable commodity but by the faith of the government that issues it. It offers the issuing government extensive control of its supply and distribution, whereas representative money allows the government to only create a limited supply of money.
Detailed explanation-2: -Fiat money is physical money-both paper money and coins-while representative money is a form of currency that represents the intent to pay, such as a check. Both fiat and representative money are backed by something. Without any backing, they would be completely worthless.
Detailed explanation-3: -Fiat money is a type of currency that is not backed by a commodity, such as gold or silver. It is typically designated by the issuing government to be legal tender.
Detailed explanation-4: -Understanding Fiat Money Fiat currency came about when governments would mint coins out of a valuable physical commodity, such as gold or silver, or print paper money that could be redeemed for a set amount of a physical commodity.
Detailed explanation-5: -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.