Question

Identify the type of money used for each transaction.

Tiles:
1) Chris bought a bagel with coins
issued by the government.
2) Karen bought a bike by exchanging
it for her silver receipt.
3) Luke paid six apples for two
dozen eggs.

Pairs:
1) representative money
2) commodity money
3) fiat money

Answer 1

1. Fiat money - issued by and valued by govt.

2. Representative money - can be exchanged for silver or gold

3. Commodity money - items with value, like bartering

Answer 2

1) Chris bought a bagel with coins issued by the government. - Fiat money

2) Karen bought a bike by exchanging it for her silver receipt. - Representative money

3) Luke paid six apples for two dozen eggs. - Commodity money

Step-by-step explanation:

Fiat money is that currency which the government print. Thus, purchasing bagel with coins is an example of using fiat money. The representative money is printed on paper it can be receipts of anything which is used as the medium of exchange and it has no intrinsic value. However, commodity money is the money that has intrinsic value but no legal obligations are associated with it.