Question

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Consider the following statements about Fiat money:

1. Their intrinsic value is much higher than the face value
2. They have very high liquidity

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Which of the above are correct?

• A. 1 only
  
• B. 2 only
  
• C. Both 1 and 2
  
• D. None of the above

Answer 1

The correct option is B 2 only


<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Fiat money is also termed as legal tender as notified by the Central Government and Central Bank. This is unlike the commodity money; it might not have an intrinsic value. Paper currencies and metal coins are examples of fiat money. They have very high liquidity