ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Representative money
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Currency
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Commodity money
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Fiat money
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Detailed explanation-1: -Legal tender is basically any currency that a government declares to be legal. Many governments issue a fiat currency, then make it legal tender by setting it as the standard for debt repayment.
Detailed explanation-2: -Fiat money, also called “legal tender, ” has value because the government decreed that is an acceptable means to pay debts.
Detailed explanation-3: -Its value comes from being declared “legal tender"-an acceptable form of payment-by the government of the issuing country. In this case, we accept the value of the money because the government says it has value and other people value it enough to accept it as payment.
Detailed explanation-4: -A fiat money is a type of currency that is declared legal tender by a government but has no intrinsic or fixed value and is not backed by any tangible asset, such as gold or silver.