Fiat Money

Which of the following is an example of fiat money?

• Gold

• Silver

• Honey Buns

• Paper money

​ (a)   money has no intrinsic value; it works only because we all believe it does.  The institution in charge of the money (​ (b)   ) has to be careful to maintain that trust.

• Fiat

• Central Bank

• commodity

• barter

Put these in chronological order for the historical development of money

• Barter(no money)

• Commodity Money

• Paper money backed by precious metals(gold standard)

• fiat money

• digital currency

Money by government decree is?

• Commodity

• Representative

• Fiat

Which type(s) of money have an unlimited supply?

• gold (commodity)

• representative

• fiat

What is the primary characteristic of fiat money?

• It is backed by a physical commodity like gold.

• It has intrinsic value.

• It is issued by a government and not backed by a physical commodity.

• It is used only in digital transactions.

Which institution is typically responsible for issuing fiat money?

• Commercial banks

• Central banks

• Private corporations

• International Monetary Fund

Why do people accept fiat money as a medium of exchange?

• Because it is made of precious metals

• Because it is universally accepted and backed by trust in the government

• Because it can be exchanged for gold

• Because it is the only form of money available

Which of the following is NOT a feature of fiat money?

• It is legal tender by government decree

• It has intrinsic value

• It is not backed by a physical commodity

• Its value is based on supply and demand

How does inflation affect fiat money?

• It increases the intrinsic value of fiat money

• It decreases the purchasing power of fiat money

• It has no effect on fiat money

• It makes fiat money more valuable