DSST Money And Banking Practice Questions - Money And Banking Exam

Fiat money has value mainly because government declares it legal tender and people accept it, while commodity money has value from the item itself. Fiat money must be redeemable for gold, while commodity money cannot be traded. Fiat money is always electronic, while commodity money is always paper currency. Fiat money can serve only as a unit of account, while commodity money can serve only as a store of value.