Money that is acceptable because the government requires that it be accepted in payment of debt is _____.

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Legal tender is money that is recognized by law as a valid means to settle debts, enforce contracts, or pay taxes. Therefore, legal tender must be accepted as a form of payment for all debts and obligations, and the refusal to accept it may give rise to legal penalties. Commodity money is a valuable substance like gold, silver, or valuable goods that are used as money on their own merit, not because they are recognized by law. Bad money is currency that has been devalued or depreciated, and its acceptance is not required by law. Money backed by the government's wealth means that the government has pledged its own assets or reserves to guarantee the value of the currency. Finally, hoarded money refers to currency held by individuals or institutions for the purpose of storing value rather than using it in commercial transactions.

Money That Is Acceptable Because the Government Requires That It