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Questions and Answers
Which type of money is accepted as a medium of exchange due to the trust that exists between the payer and the payee?
Which type of money is a government-issued currency that is not backed by a commodity such as gold?
Which type of money is described as claims against financial institutions that can be used to purchase goods or services?
Which type of money is equal to a commodity used for exchange?
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Which type of money gives central banks greater control over the economy because they can control how much money is printed?
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Study Notes
Types of Money
- Fiat money is accepted as a medium of exchange due to the trust that exists between the payer and the payee.
Currency Types
- Fiat currency is a government-issued currency that is not backed by a commodity such as gold.
Claims on Financial Institutions
- Commercial bank money is described as claims against financial institutions that can be used to purchase goods or services.
Commodity-Based Money
- Commodity-based money is equal to a commodity used for exchange.
Monetary Control
- Fiat money gives central banks greater control over the economy because they can control how much money is printed.
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Description
Test your knowledge of the different types of money in macroeconomics! Learn about commodity money, fiduciary money, and fiat money. Challenge yourself to identify the characteristics and distinctions of each type.
