What characterizes fiat money?
A) It has no intrinsic value.
B) It is backed by gold.
C) It has intrinsic value equal to its value in exchange.
D) It is an illiquid asset.

Question

Quizplus · Accepted Answer

Fiat money has no intrinsic value and is only valuable because the government declares it to be so and people accept it as a means of exchange. It is not backed by gold or any other physical commodity. It is also a liquid asset, as it can be easily exchanged for goods and services.

What Characterizes Fiat Money