Question

What is fiat​ money?

A. an asset that has the ability to be easily converted into the medium of exchange
B. money that has value independent of its use as money
C. money issued by financial​ intermediaries, such as​ banks, but not the central bank
D. money that is authorized by a central bank and that does not have to be exchanged for gold or some other commodity money

Answer 1

D. money that is authorized by a central bank and that does not have to be exchanged for gold or some other commodity money

Step-by-step explanation:

By definition, fiat money is a physical money that is made a legal tender by the government or other authoritative figure.

It is not backed by any physical commodity like silver or gold but only by the government that distributed it . Additionally, if inflation occurs in a country that uses fiat money as a legal tender, the owners will go at a huge loss since it cannot be redeemed and in worst case scenario such as hyperinflation, it will be worthless.