Fiat money is Select one: a.money backed by gold or some other precious metal. b.commodity money like salt. c.valuable only because some authority decrees it to be. d.the name given to Italian lira when it is falling in value.
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Government-produced currency known as "fiat money" is not backed by a tangible good like gold or silver, but rather by the government that created it. A sort of currency known as fiat money is one that a government has legalised but does not have any inherent or fixed value and is not backed by any actual object, such as gold or silver. Fiat money allows governments more freedom to control their own currencies, establish monetary policy, and maintain market stability. Additionally, it permits fractional reserve banking, which enables commercial banks to increase their cash reserves in order to meet borrowers' demands.
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