Credit money is backed by:

Question

Quizplus · Accepted Answer

Credit money is not backed by any physical asset such as gold or silver. Instead, it is backed by the creditworthiness of the issuer or depository institution. This means that the value of credit money depends on the reputation and financial stability of the institution that issues or holds it. In other words, people trust that the institution will be able to honor its obligations and that the credit money can be used to purchase goods and services. Therefore, the most appropriate choice is C, the creditworthiness of the issuer.

Credit Money Is Backed By