The primary reason why fiat money has value is becauseQuestion 24AnswerSelect one:a.banks act as intermediaries and, through the money multiplier process, prevent the money from losing value.b.in a growing economy demand for government money will always exceed the demand for private money.c.it is backed by a precious metal.d.the government has a monopoly of force and declares the money legal tender.e.the central bank always ensures that the money has value.
Question
The primary reason why fiat money has value is becauseQuestion 24AnswerSelect one:a.banks act as intermediaries and, through the money multiplier process, prevent the money from losing value.b.in a growing economy demand for government money will always exceed the demand for private money.c.it is backed by a precious metal.d.the government has a monopoly of force and declares the money legal tender.e.the central bank always ensures that the money has value.
Solution
The primary reason why fiat money has value is because the government has a monopoly of force and declares the money legal tender. This is known as legal tender status, which means that the money is recognized by the government as a valid form of payment. This gives the money value because people trust that they can use it to purchase goods and services, and that others will accept it as a form of payment. This trust is backed by the government's power to enforce the use of the money as a medium of exchange. Without this legal tender status, the money would not have any value.
Similar Questions
Fiat money has value because:A.it is assigned value by a government.B.it can be exchanged for specific goods.C.it is made of a valuable material.D.it can be used for food or shelter.
Fiat money is moneyGroup of answer choicesbacked by gold or silver.that can be converted to gold or silver.because a government says it is.backed by land.
The U.S. dollar is a currency made of low-cost materials. It is valuable only because it is recognized by the U.S. government, which is a powerful global authority. This means that the U.S. dollar serves as which type of money?A.Currency moneyB.Commodity moneyC.Fiat moneyD.Representative money
money has value in itself as well as value in its use as money.
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