Question

Fiat money:________.a) has no intrinsic value. b) is backed by gold. c) is a medium of exchange but not a unit of account. d) is any close substitute for curren

Answer 1

Answer: a) has no intrinsic value

Explanation:

Fiat currency is money that is used in a country and is regulated by the central bank of that country. Fiat money has no commodity backing it such as gold or silver and has no intrinsic value of its own.

It is instead backed by the full faith and credit of the government of the country that produces it. For instance, the US dollar is backed by the full faith and credit of the US government.