Question

Drag the tiles to the correct boxes to complete the pairs. identify the type of money used for each transaction. chris bought a bagel with coins issued by the government. karen bought a bike by exchanging it for her silver receipt. luke paid six apples for two dozen eggs. representative money arrowright commodity money arrowright fiat money arrowright

Answer 1

Karen used her silver receipt representative money to purchase a bike. Luke purchased two dozen eggs with commodity money and six apples.

Chris used coins from the government's flat money to purchase a bagel.

What is commodity money?

• Money that derives its worth from the commodity from which it is made is known as commodity money.
• Commodity money is made up of things that have worth or utility beyond only being exchangeable for products (intrinsic value).
• This contrasts with fiat money, which derives its value from having been established as money by government regulation, and representational money, which has no intrinsic worth but instead represents something valuable like gold or silver, which can be exchanged.

What is flat money?

• A form of currency known as fiat money is not backed by any physical good, like gold or silver.
• Usually, the government declares something to be legal tender through a decree.
• Fiat money has occasionally been created throughout history by regional banks and other organizations.

Learn more about commodity money here:

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