The word "fiat" is

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The word "fiat" is

BlackTom AI · Accepted Answer

Exploring the term fiat in the context of money, we can evaluate each option for accuracy.
Option 1: 'the term used to define the concept of barter.' Barter refers to directly exchanging goods and services without money, which is conceptually opposite to fiat money. This option misidentifies fiat by linking it to barter, so it is incorrect.
Option 2: 'another word to mean the "double coincidence of wants."' The double coincidence of wants describes a problem in barter systems where two parties each desire what the other has. Fiat money is introduced to circumvent that problem, so this option describes barter-era concepts rather than fiat itself and is wrong.
Option 3: 'Latin for "backed by gold."' Fiat money is not backed by gold or any physical commodity; it derives value from government decree and trust. This Latin-backed notion refers to the gold standard, not fiat money, making this statement inaccurate.
Option 4: 'used to describe today's money because it is money set by law.' This captures the essence of fiat money: its value comes from government regulation and legal tender status rather than intrinsic commodity value. This option correctly characterizes fiat money.
Option 5: 'used to describe money from when Kings ruled by decree or fiat.' While historic proclamations by rulers could invoke fiat-like authority, this option misstates fiat by implying a singular ancient origin and conflating royal decrees with the modern monetary system. Fiat money today is not defined by royal decrees of ancient kings but by modern legal tender laws, so this is misleading.
Overall, the assertions progress from a misinterpretation of barter concepts and the double coincidence of wants, through a common misconception about backing by gold, to the precise description of fiat money as legal-tender currency created by government decree. The accurate characterization hinges on the legal authority behind the money rather than commodity backing or barter-era terminology.

ECON 210-003 Homework 10

The word "fiat" is

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ECON 210-003 Homework 10

The word "fiat" is

View Explanation

Log in for full answers

Similar Questions

Fiat money has

Fiat money has value because ______. Select all that apply.

位置16的问题 Fiat currency is backed by a physical commodity like gold or silver.TrueFalse

Part 1Which of the following is a disadvantage of using fiat money LOADING... ​?Part 2 A. Public authorities may be tempted to produce too much of it B. Fiat money is not easily divisible or suitable for small purchases C. Fiat money is not portable or widely accepted

Part 1Which of the following is a disadvantage of using fiat money LOADING... ​?Part 2 A. Fiat money is not portable or widely accepted B. Fiat money is not easily divisible or suitable for small purchases C. Public authorities may be tempted to produce too much of it

Money whose value derives entirely from its official status as a means of exchange is known as:

93. Which of the following does not explain what backs the money supply in the United States? A. It is backed by gold. B. It is widely accepted in transactions. C. It is designated "legal tender" by the federal government. D. It is relatively scarce.

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Part 1Which of the following is a disadvantage of using fiat money LOADING... ?Part 2 A. Public authorities may be tempted to produce too much of it B. Fiat money is not easily divisible or suitable for small purchases C. Fiat money is not portable or widely accepted

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