An item designated as money that is intrinsically worthless is ?
Correct answer: C. fiat money
- A. precious metals
- B. commodity money
- C. fiat money
- D. barter items
Explanation
Fiat money has little or no intrinsic value as a commodity, but it is accepted because the government declares it legal tender and users trust it as a medium of exchange. Precious metals and commodity money have value independent of their monetary use.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
Which of the following is included in broad money, but not included in narrow money ?
Which of the following activities is one of the responsibilities of the Bank of England to the banking system ?
Assume that commercial banks are holding excess reserves because business firms and consumers are not willing to borrow money A decrease in the discount rate is likely to ?
Government Securities with terms of more than one year are called ?
If there is a general shortage of liquidity in the money market then ?
The three main tools of monetary policy are ?