The value of money results from
A) its backing
B) rates set by the Federal Reserve
C) its purchasing power
D) its backing by gold

Question

Quizplus · Accepted Answer

The value of money ultimately results from its purchasing power, which is determined by the supply of money in the economy and the demand for it. While historically money was backed by gold or other tangible assets, most modern currencies are not. The rates set by the Federal Reserve may affect the supply of money and therefore impact its value, but ultimately it is the purchasing power that determines its true worth.

The Value of Money Results from