Which of the following characterizes commodity money?
A)It is money that is backed by gold.
B)It is the principal type of money in use today.
C)It is money with intrinsic value.
D)It is comprised of receipts created in international trade that are used as a medium of exchange.

Question

Quizplus · Accepted Answer

Commodity money is a currency that has intrinsic value because it is made of a valuable commodity, such as gold, silver, or tobacco. Therefore, this option is the most suitable description of commodity money. The other choices are incorrect for different reasons: A) gold-backed money is not the same as commodity money, as it is only backed by a certain amount of gold rather than made of it; B) commodity money is not the principal type of money used today, as most currencies are fiat money that has no intrinsic value; and D) receipts created in international trade are not a form of commodity money, as they do not have any intrinsic value by themselves.

Which of the Following Characterizes Commodity Money