Question

FIAT money is something which _________.

• A. has huge intrinsic value
• B. has no intrinsic value
• C. is black money
• D. depreciates fast

Answer 1

Answer: (B)

has no intrinsic value

FIAT money is money whose face value is greater than its commodity value. In other words it has no intrinsic value and it refers to that money which is issued by order or authority of the government. It includes all notes and coins which the people in a country are legally bound to accept as a medium of exchange. For example: For example- the hundred rupee note in India has a very low commodity value as compared to its face value which is Rs.100.