In a fiduciary monetary system
A) coins get their value from the precious metals of which they are made.
B) money gets its value from the confidence that the public has in its acceptability.
C) paper currency does not have value, but balances in checking accounts do.
D) checking account balances do not have value, but paper currency does.

Question

Quizplus · Accepted Answer

In a fiduciary monetary system, money gets its value from the confidence that the public has in its acceptability. This means that the public trusts that the money they hold will be accepted as a means of payment for goods and services. This is different from a commodity-based system (such as a gold standard) where the value of money is derived from a fixed amount of a precious metal. In a fiduciary monetary system, the value of money is not determined by the intrinsic value of the material it is made of, but rather by its acceptance as a medium of exchange.

In a Fiduciary Monetary System