What determines the acceptability of dollar bills as a medium of exchange?
A) our society's willingness to use green paper notes issued by the Federal Reserve as money
B) the willingness of the Federal Reserve to redeem dollar bills for gold
C) the willingness of the U.S. Treasury to redeem dollar bills for gold
D) the public's fear that failing to accept dollar bills will trigger a hyperinflation

Question

Quizplus · Accepted Answer

The acceptability of dollar bills as a medium of exchange is primarily based on our society's willingness to use them as money. The belief that others will also accept them as a medium of exchange gives the dollar its value. It is not determined by the willingness of the Federal Reserve or U.S. Treasury to redeem dollar bills for gold, nor by the fear of hyperinflation if people refuse to accept them.

What Determines the Acceptability of Dollar Bills as a Medium