Which of the following is an example of fiat money?
A)A cowry shell used as money on a South Pacific island
B)A gold coin used as money in nineteenth century England
C)A Federal Reserve Note used as money in the twenty-first century United States
D)A pound of salt used as money in medieval France

Question

Quizplus · Accepted Answer

Fiat money is money that is not backed by a commodity such as gold or silver, but is instead declared legal tender by a government. Federal Reserve Notes, the currency used in the United States today, are an example of fiat money. A cowry shell, a gold coin, and a pound of salt are all examples of commodity money, which have intrinsic value apart from their use as money.

Which of the Following Is an Example of Fiat Money