Fiat Money

Fiat Money is Money...

• a) ...without intrinsic value.

• b) ...with intrinsic value.

• c) ...that can be also consumed.

• d) ...this is not declared by the government as legal tender

Fiat money's value originates from government decree

• True

• False

The production of fiat money is mostly controlled by

• citizens

• rich people

• government

Commodity money has intrinsic value.

• True

• False

Paper currency is an example of ...................

• barter system

• Commodity money

• Fiat money

The value of fiat money is back by ........................

• gold

• silver

• none of the above

The barter system suffers from the requirement that the traders must have a coincidence of wants

• True

• False

What is the definition of barter?

• to visit another country with friends

• to exchange resources or services for mutual advantage

• to change clothes and buy new ones

• to buy an elephant and an orange

What problems could occur when swapping goods in the past?

• the food could go rotten

• the items were very smelly

• the food was made of gold

Copper served as commodity money in the past.

• True

• False