The wide acceptance of fiat money is determined by:
A)people's belief that it is worth something.
B)the amount of precious metal that the government holds to back the money.
C)the money's market value as a commodity.
D)the rate of interest,which is the price paid to borrow money.
E)its ability to function as a unit of account.

Question

Quizplus · Accepted Answer

The wide acceptance of fiat money is determined by people's beliefs that it is worth something. Fiat money has no intrinsic value and is not backed by any commodity, but it is widely accepted because people have faith in the government and the economy that issue and regulate it. Additionally, fiat money is also widely accepted because it can be used as a medium of exchange, a store of value, and a unit of account.

The Wide Acceptance of Fiat Money Is Determined By