Fiat money is currency that is authorized by the central bank or governmental body and has little to no intrinsic value. It is valuable because it is widely accepted as a medium of exchange and can be used to purchase goods and services. It is not backed by the quantity of gold held by the central bank like in the gold standard.

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Fiat Money Has

Question 12

Multiple Choice

Fiat money has

A) little to no intrinsic value but is backed by the quantity of gold held by the central bank.
B) little to no intrinsic value and is authorized by the central bank or governmental body.
C) value,because it can be redeemed for gold by the central bank.
D) a great intrinsic value that is independent of its use as money.

Correct Answer: