In Which of the Following Ways Are a Fiat Money

question 47

Multiple Choice

In which of the following ways are a fiat money system and a commodity money system different?

• A) Commodity money is valuable because of the material of which it is made, and fiat money has value because people trust it.
• B) Fiat money is valuable because of the material of which it is made, and commodity money has value because people trust it.
• C) Commodity money is created by banks through a fractional reserve banking system, and this is not done with fiat money.
• D) Commodity money is accepted by the people of the country even though it is not official currency, and fiat money is declared by a government to be the official currency of the country.

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Definitions:

Operating Cash Flows

Money generated from a company's regular business operations, indicating its ability to cover expenses and invest.

Fixed Assets

Long-term tangible assets such as buildings, machinery, and equipment that a company uses in its operations and is not expected to consume or convert into cash within one year.

Net Income

The conclusive earnings a company achieves post the deduction of all operational expenses and tax liabilities from its income.

Operating Efficiency

A measure of how well a company uses its assets and manages its operations to generate income.