Question

Which of the following most accurately explains why fiat money differs from commodity money?

A. Fait money has value because it is a precious metal such as gold.
B. Fait money only has value as a medum of exchange
C. Fait money can also be used as a productive input.
D. Fait money has value because it enables the barter system to work.

Answer 1

I think it is B. Fait money only has value as a medium of exchange but idk put it and see if im right I researched it and got that so let me know if im right :)

Answer 2

The correct answer is option B. "Fait money only has value as a medum of exchange".

Step-by-step explanation:

Commodity money is based on a "good", often a precious metal such as gold or silver, therefore it has value by itself. On the other hand, fiat money is a legal tender or currency, which has only a representative value by government imposition, and because the people using it maintain faith in it having value.