What is the difference between commodity money and fiat money?
A) The value of commodity money is set by the government, and the worth of fiat money is based on the material out of which it is made.
B) Commodity money is paper bills, and fiat money is coins.
C) The value of commodity money is based on the material out of which it is made, and the value of fiat money comes from its acceptance by its users.
D) Commodity money is checking accounts, and fiat money is coins and bills.

Question

Quizplus · Accepted Answer

The value of commodity money is derived from the material it is made of, such as gold or silver, which has intrinsic value. Fiat money, on the other hand, has value because a government decrees it as legal tender and it is accepted by people in transactions for goods and services, not because of the material it is made from.

What Is the Difference Between Commodity Money and Fiat Money