Economics · Money and Banking
Which of the following descriptions best defines 'fiat money'?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Any form of token asset that can be directly consumed as a physical commodity
- 2Money that derives its value entirely from its intrinsic material worth
- 3Government-issued currency that is not backed by a physical commodity✓
- 4Currency that is legally tied to and redeemable for a fixed amount of gold
Correct answer
Government-issued currency that is not backed by a physical commodity
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