The government has chosen to give itself the ability to freely manage the nation's money supply by choosing Blank______.

Question

Multiple choice question.

not to back the currency with anything tangible

to back the currency with checkable deposits

to back the currency with gold

to allow banks to back the currency

Answer 1

The correct answer is:

not to back the currency with anything tangible.

This choice reflects the idea that many modern economies operate on a fiat currency system, where the currency is not backed by a physical commodity like gold, but rather by the government's declaration that it has value.