Answer:
3. Describe each of the three categories that money is generally placed in. Include an
example of each. (4 points)
Step-by-step explanation:
The three categories that money is generally placed in are as follows:
Commodity Money: Commodity money has intrinsic value and is used as a medium of exchange. It can be used for other purposes as well, like gold, silver, and other precious metals. For example, in the past, gold coins and silver coins were used as commodity money.
Fiat Money: Fiat money is the money that the government declares as legal tender, and it has no intrinsic value. It is used as a medium of exchange. The value of fiat money is based on the supply and demand for it. For example, the U.S. dollar is fiat money.
Representative Money: Representative money is backed by something that has intrinsic value, like gold or silver certificates. It is a paper or electronic form of money that represents a commodity. For example, paper currency that is backed by gold or silver.