Question

Representative money has $100\%$ backing of gold and silver.

• A. True
• B. False

Answer 1

The correct option is A True

Representative Money type of money refers to money which is usually made of paper. The value of representative money is much higher than its value as a commodity. It is accepted as money as it can be conveniently used for carrying out transactions. Paper money is 100% backed by metallic reserve of either gold or silver and is redeemable at the option of the holder. It is also known as Representative full-bodied money.