Money in a fiduciary monetary system is backed by
A) a commodity such as gold or silver.
B) the public's confidence that the assets will continue to serve as money.
C) the intrinsic value of the materials used to make the assets that serve as money.
D) assets owned by the government that are intrinsically valuable.

Question

Quizplus · Accepted Answer

In a fiduciary monetary system, money is backed by the public's confidence that the assets (such as paper currency) will continue to serve as money. This means that the value of money is not based on any inherent value of the physical materials that make it up (as in option C), or on assets owned by the government (as in option D). It also means that the backing is not based on a commodity like gold or silver (as in option A), which is the characteristic of a commodity monetary system.

Money in a Fiduciary Monetary System Is Backed by