Chapter 14, Problem 3AA

To determine

To choose: The term that best completes the given sentence.

Explanation of Solution

The correct answer is convert.

At, one time, the government of United States issued representative money in terms of silver and gold certificates. Private Banks have approved deposits of silver ingots or gold bars. The notes were a pledge to turn the paper money back into coins or bullion on demand, in return for paper money called banknotes. However, today all United Sates money is fait money, meaning that its face value occur through government fait, to order. It is in this war declared legal tender.

To affect economic growth, the U.S. government uses two forms of policies monetary policy and fiscal policy. This is done by an autonomous government entity called the system of Federal Reserve ("the Fed"), which has the authority in the matter of money supply and interest rates.

Economics Concept Introduction

Introduction: Printing more money by the government for paying off their national debt could lead to rise in inflation. The inflationary increase would lower bond value. If inflation gets higher, people don't want to buy bonds because their value goes down.