A fiduciary monetary standard exists when the value of a currency
A)is determined by law.
B)is convertible to a fixed quantity of gold.
C)depends upon the public's confidence that the currency can be exchanged for goods and services.
D)increases with inflation.

Question

Quizplus · Accepted Answer

A fiduciary monetary standard exists when the value of a currency depends upon the public's confidence that the currency can be exchanged for goods and services. In other words, there is no underlying commodity (such as gold) that the currency can be converted to, but rather the value is based on trust in the issuing government and its ability to maintain the currency's value.

A Fiduciary Monetary Standard Exists When the Value of a Currency