Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 5R, Problem 10MCQ
To determine
The correct option that defines the drivers of the fiat money’s value.
Expert Solution & Answer
Answer to Problem 10MCQ
Option a is correct.
Explanation of Solution
Explanation for the correct option:
a.
Fiat money is the historical term that has been used by rulers. Government fiat is a type of money where value derives from its official status for payment purposes. Therefore, option a is correct.
Explanation for incorrect options:
b.
The medium of exchange is the function of money rather than its type. Therefore, option b is incorrect.
c.
Commodity-backed money is one type of money where the promise is made by the party to convert it into some valuable aspect. Therefore, option c is incorrect.
d.
Gold and silver are commodities that possess some intrinsic value. Therefore, option d is incorrect.
e.
Exchange rate refers to the rates at which the currency of one country is an exchanged with the currency of another country. Therefore, option e is incorrect.
Economics Concept Introduction
Characteristics of money: Main characteristics of money refer to the traits that money should possess which include durability, being portable, divisible, uniform, and acceptable, and has limited supply.
Fiat money: It is one of the types of money where the government can manage the money supply in the economy as its value is based on the official status.
Chapter 5R Solutions
Krugman's Economics For The Ap® Course
Ch. 5R - Prob. 1MCQCh. 5R - Prob. 2MCQCh. 5R - Prob. 3MCQCh. 5R - Prob. 4MCQCh. 5R - Prob. 5MCQCh. 5R - Prob. 6MCQCh. 5R - Prob. 7MCQCh. 5R - Prob. 8MCQCh. 5R - Prob. 9MCQCh. 5R - Prob. 10MCQ
Ch. 5R - Prob. 11MCQCh. 5R - Prob. 12MCQCh. 5R - Prob. 13MCQCh. 5R - Prob. 14MCQCh. 5R - Prob. 15MCQCh. 5R - Prob. 16MCQCh. 5R - Prob. 17MCQCh. 5R - Prob. 18MCQCh. 5R - Prob. 19MCQCh. 5R - Prob. 20MCQCh. 5R - Prob. 21MCQCh. 5R - Prob. 22MCQCh. 5R - Prob. 23MCQCh. 5R - Prob. 24MCQCh. 5R - Prob. 25MCQCh. 5R - Prob. 1FRQCh. 5R - Prob. 2FRQCh. 5R - Prob. 3FRQCh. 5R - Prob. 1CTQCh. 5R - Prob. 2CTQCh. 5R - Prob. 3CTQCh. 5R - Prob. 4CTQ
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