Fiat money generally becomes worthless if the issuing government - such as the Confederate government of the Civil War - fails.

Question

Quizplus · Accepted Answer

Fiat money is not backed by a physical commodity or precious metal, but by the government that issues it. Therefore, if the government fails or loses credibility, the value of its fiat money can decrease or become worthless. This has happened in various historical situations, such as during the hyperinflation in Germany after World War I or the collapse of the Zimbabwean dollar in the 2000s.

Fiat Money Generally Becomes Worthless If the Issuing Government -