Which of the following statements correctly describes a characteristic of fiat money?(1 point)

Responses

Fiat money derives its value from government regulation.
Fiat money derives its value from government regulation.

Fiat money is rarely used as a method of payment.
Fiat money is rarely used as a method of payment.

Fiat money is hard to carry around because it is a commodity.
Fiat money is hard to carry around because it is a commodity.

Fiat money ties up resources like gold or silver.

1 answer

The statement that correctly describes a characteristic of fiat money is:

Fiat money derives its value from government regulation.

Fiat money is not backed by a physical commodity, but rather by the government that issues it, which establishes its value and legality for transactions. The other statements about fiat money are incorrect.