Which of the Following Correctly Describes the Difference Between Commodity

question 74

Multiple Choice

Which of the following correctly describes the difference between commodity money and fiat money?

• A) Fiat money has value based on the material from which it is made, while commodity money is accepted by law and not because of its tangible value.
• B) Commodity money is either made out of a valuable commodity like silver or gold, or is redeemable for a valuable commodity. Fiat money is not.
• C) Commodity money can only be used to buy commodities such as grains or lumber, while fiat money can be used to buy anything.
• D) Fiat money is used during times of emergency, such as hurricanes or war, when the existing stock of commodity money is inadequate to purchase needed goods and services.

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Definitions:

Line of Credit

An arrangement between a financial institution and a client that establishes a maximum loan balance that the borrower can access.

Inventory

The total amount of goods and materials held by a business for the purpose of sale or production.

Debtor's Rights

Legal rights and protections afforded to individuals or entities that owe money, guarding against unfair treatment and abuses by creditors.

Article 9

A section of the Uniform Commercial Code in the United States that governs secured transactions involving personal property.