A fiduciary monetary system means
A) that the value of each currency is determined by the amount of gold held by each nation.
B) that the currency is backed by implicit faith in government.
C) that money is legal tender.
D) that money has commodity value.

Question

Quizplus · Accepted Answer

A fiduciary monetary system is one in which the currency is backed by the implicit faith and trust in the government or central authority that issues it. In other words, its value is not based on any tangible or physical asset like gold or silver, but on the belief that it can be exchanged for goods and services. Legal tender refers to the fact that the currency can be used to settle debts, while commodity value implies that the money itself has value due to its intrinsic properties or characteristics, like gold coins. Neither of these concepts alone captures the essence of a fiduciary system.

A Fiduciary Monetary System Means