For much of U.S. history, citizens could exchange paper dollars for a certain amount of gold. This made paper money in the United States an example of:A.commodity money.B.fiat money.C.inflated money.D.representative money.
Question
For much of U.S. history, citizens could exchange paper dollars for a certain amount of gold. This made paper money in the United States an example of:A.commodity money.B.fiat money.C.inflated money.D.representative money.
Solution
The correct answer is D. Representative money. This is because, during that period in U.S. history, the paper money (dollars) represented a certain amount of gold that could be exchanged. This means the value of the money was backed by a physical commodity, in this case, gold.
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