Question

Which of the following would be considered fiat money in the US?

A. A gold coin

B. A computer

C. A twenty-dollar bill

D. A bottle of water

E. All of the above

Without money, which of the following will occur?

A. People give up trading goods and services

B. Nothing serves as a store of value

C. People everywhere become self-sufficient

D. People must spend large amounts of time finding someone who has exactly what they want

E. None of the above

What happens if there is inflation?

A. Nothing

B. Borrowers tend to be worse off

C. Lenders tend to be worse off

D. The demand for money will increase

E. Borrowers tend to be worse off and the demand for money increases

Answer 1

a) "C"

A twenty dollar bill be considered as a fiat money in the US.

b) "D"

without money there must be double co incidence of wants i.e. people will spend considerable time to exchange goods in the market.

c) "C"

inflation in the market will affect the lenders negatively and benefit the borrowers. The answer is "C".