Understanding Money

What is a key characteristic of commodity money?

• It has no intrinsic value.

• Its value is stable and predictable.

• It is backed by a government authority.

• It has intrinsic value like gold or silver.

Why did people start using representative money?

• It was heavier than gold.

• It was easier to carry and exchange.

• It was less trusted than gold.

• It had more intrinsic value than gold.

What is fiat money?

• Money that is not accepted by anyone.

• Money with intrinsic value.

• Money backed by a commodity.

• Money authorized by a government.

What is bank money?

• Money that cannot be exchanged.

• Money with intrinsic value.

• Book credit offered by banks.

• Physical currency like coins.

What happens if too much fiat money is printed?

• It becomes more valuable.

• People search for alternative money.

• It gains intrinsic value.

• It is accepted more widely.