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What Is the Difference Between Commodity Money and Fiat Money

question 41

Essay

What is the difference between commodity money and fiat money? Why do people accept fiat currency in trade for goods and services?


Definitions:

Capacity

The maximum level of output that a company can sustain to produce in a given period under normal conditions.

Predetermined Overhead Rate

A predetermined rate for distributing overhead expenses to products or services, based on anticipated costs and levels of activity.

Machine-Hours

A measure of production output or activity level based on the number of hours machines are operated.

Unused Capacity

The portion of a company’s resources or capabilities that are not currently utilized or producing income.

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