What is commodity money Economics quizlet?

Commodity Money: A good that is used as a medium of exchange but also has intrinsic worth because it has other uses. An institution that receives, lends, borrow, exchange, issues and safeguards money. National Bank: A commercial bank chartered by the federal government.

What is the meaning of commodity money?

Commodity money is money whose value comes from a commodity of which it is made. Examples of commodities that have been used as media of exchange include gold, silver, copper, salt, peppercorns, tea, decorated belts, shells, alcohol, cigarettes, silk, candy, nails, cocoa beans, cowries and barley.

Does commodity money qualify as money?

Commodity money has been used throughout history as a medium of economic exchange. Commodity money is money that has intrinsic value, meaning that it has value even if it is not used as money. Examples of commodity money include precious metals, foodstuffs, and even cigarettes.

When money takes the form of commodity it is called commodity money which is quizlet?

Money taking the form of a commodity with intrinsic value is known as commodity money. An item has intrinsic value if it has value outside of its use as money. Energy bars are used as a medium of exchange by American prisoners, but they also have value outside of their use as money.

How does commodity money differ from exchange money quizlet?

Terms in this set (10) What is the difference between commodity money and fiat money? Commodity money involves the use of an actual good in place of money (gold coin, tobacco). Fiat money has no other value than as a medium for exchange; value comes from government (paper money).

What is the difference between commodity money and commodity-backed money quizlet?

Commodity-backed money uses resources more efficiently than simple commodity money, like gold and silver coins, because commodity-backed money ties up fewer valuable resources.

Which is not a commodity money?

Fiat money is a government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it.

What is the problem of commodity money?

Risk of Volatility While commodity money typically has less volatility during turbulent economic developments, commodity money can still lose value. For example, both gold and oil are valuable commodities; however, the prices of both gold and oil undergo increases and decreases over time.

When can money be used as a commodity?

Money is the collection of objects that are used as media of exchange. Commodity money is a medium of exchange that may become (or be transformed into) a commodity, useful in production or consumption. This is in contrast to fiat money, which is intrinsically useless.

What is the difference between commodity money and commodity-backed currency?

While commodity money uses the commodity itself as currency directly, commodity-backed money is money that can be exchanged on demand for a specific commodity.

How does commodity money differ from exchange money?

Commodity money has some intrinsic value due to the content of precious metal it is made up of or backed by, but debasement or increases in precious metal supply can cause inflation. Fiat money is backed only by the faith of the government and its ability to levy taxes.

What is the difference between commodity money and commodity-backed money?