Which type of money is most likely to see its value fluctuate in the foreign exchange market?
A)fiat money
B)commodity money
C)price-indexed money
D)pegged-exchange rate

Question

Quizplus · Accepted Answer

Fiat money is most likely to see its value fluctuate in the foreign exchange market because its value is not backed by any physical commodity or asset. Its value is solely based on the government's promise to pay its debts and the market's perception of the strength of the economy. Therefore, changes in economic conditions or government policies can cause the value of fiat money to rise or fall in relation to other currencies.

Which Type of Money Is Most Likely to See Its