GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The currency is backed by gold reserves
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The currency is backed by tangible assets
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The currency is backed by budgetary support
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The currency is backed by Government Guarantee
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Detailed explanation-1: -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.
Detailed explanation-2: -What is Fiat Money? 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-3: -Currency notes and coins are known as fiat money. Currency notes and coins are legal tender. They do not have intrinsic value like silver or gold coins. Every currency note has a promise from the Governor of RBI that the person will have the purchasing power equal to the value printed on the currency note.