Question : . ……………. refers to money backed by the order or authority of the government.
Option 1: Legal tender money
Option 2: Fiat money
Option 3: Fiduciary money
Option 4: Both (a) and (c)
Correct Answer: Both (a) and (c)
Solution : The correct answer is d) Both (a) and (c)
Both legal tender money and fiduciary money refer to money backed by the order or authority of the government.
Legal tender money, is the currency or coins that are recognized by law as a valid means of payment in a country. It is the money that must be accepted as a form of payment for goods, services, and debts within the jurisdiction of the country. The government declares certain forms of money as legal tender, establishing their acceptance and validity for transactions.
Fiduciary money, refers to money that is not fully backed by reserves of gold or other physical assets but is backed by the trust and confidence of the public in the issuing authority, which is usually the government or the central bank. Fiduciary money is based on the belief that it will be accepted as a medium of exchange and holds value because of the public's faith in the authority issuing it.
Therefore, the correct answer is (d) Both (a) and (c) as both legal tender money and fiduciary money refer to money backed by the order or authority of the government.
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