What Is the Most Important Factor for Federal Reserve Currency

question 21

Multiple Choice

What is the most important factor for Federal Reserve currency to be accepted as money?

• A) its acceptance by businesses and households in the United States in exchange for goods and services
• B) its designation as legal tender by the federal government
• C) the willingness of the federal government to accept it in exchange for an equivalent amount of gold or silver coins
• D) the willingness of foreign businesses and banks to accept it in exchange for goods and services

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Definitions:

Payment Promise

A commitment by one party to pay another, often documented in a formal agreement or note.

Common Stock

A type of security that represents ownership in a corporation, entitling holders to a share of the company’s profits through dividends and/or capital appreciation.

Photography Equipment

Tools and devices used in the process of capturing photographs, such as cameras, lenses, lighting, and accessories.

Cash Account

An account that records cash transactions, including receipts and payments of cash.