In a fiduciary monetary system, the value of the money issued by a government is based on
A) the gold held in that government's vaults.
B) public confidence in that currency's acceptability and predictability of value.
C) the ability to convert it to some valuable commodity.
D) its being made out of some material with a market value equal to a bill's face value.

Question

Quizplus · Accepted Answer

In a fiduciary monetary system, the value of the money issued by a government is based on the public's confidence in the currency's acceptability and predictability of value. It is not backed by a commodity, such as gold, nor is its material value equal to its face value. Instead, its value is derived from the trust people have in it as a medium of exchange.

In a Fiduciary Monetary System, the Value of the Money