The two most common types of money in circulation in Canada today consist of
A) private bank notes and commodity-backed paper currency.
B) commodity-backed paper currency and fiat money.
C) fiat money and transaction deposits at banks.
D) transaction deposits at banks and commodity money.
E) private bank notes and commodity money.

Question

Quizplus · Accepted Answer

The two most common types of money in circulation in Canada today are fiat money (which is not backed by a physical commodity like gold) and transaction deposits at banks (which are created through the banking system). Private bank notes are no longer legal tender in Canada, and commodity-backed paper currency is not currently in circulation. Commodity money, such as gold or silver, is also not commonly used as a medium of exchange in Canada. Therefore, C is the correct choice.

The Two Most Common Types of Money in Circulation in Canada