Which of the following does not explain what backs the money supply in the United States?

Question

Multiple Choice
It is backed by gold.
It is widely accepted in transactions.
It is designated "legal tender" by the federal government.
It is relatively scarce.

Answer 1

The option that does not explain what backs the money supply in the United States is:

It is backed by gold.

The U.S. abandoned the gold standard in 1971, and the money supply is now backed by trust in the government and the economy rather than a physical commodity like gold.