The paper currency that is currently used in the United States is an example of ________ money.
A) hard
B) fiat
C) commodity
D) price-indexed

Question

Quizplus · Accepted Answer

Fiat money is money that has no intrinsic value and is declared legal tender by a government. The paper currency used in the United States is fiat money because it has no intrinsic value and is only valuable because the government says it is. Hard money refers to money that is backed by a tangible commodity such as gold or silver, which is not the case with the US dollar. Commodity money is money that has intrinsic value, such as gold or other precious metals, which is also not the case with the US dollar. Price-indexed money refers to money whose value is tied to a specific price index, which is not the case with the US dollar.

The Paper Currency That Is Currently Used in the United