PRC-3 · Chapter 17 · Question 13 of 20
Modern paper currency has no actual intrinsic value (it is just printed paper), but everyone accepts it because the government declares it legal tender. This type of money is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Fiat money
Explanation
Fiat money is currency that lacks intrinsic physical value but holds purchasing power by government decree and law.
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