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valkas [14]
3 years ago
13

What is the difference between commodity money and fiat​ money?

Business
1 answer:
Eva8 [605]3 years ago
6 0

Answer:

Please see answer in the explanation below

Explanation:

Commodity money can be defined as money that its value comes from the commodity with which it was made. That is, commodity money is money that is gotten as a result of the material from which the money was made. Examples of these materials are silver, gold, etc. These materials have intrinsic value on their own as the materials have a worth of their own before being used to make currency.

Fiat money on the other hand is defined as money that is declared as the legal tender by the government. That means that fiat money is the money that is acceptable as a medium of exchange for goods and services as issued by the government. Fiat money does not have intrinsic value.

Cheers.

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Explanation:

Given that,

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Therefore, what was worth $120 earlier, is not worth only $100.

Hence, $120 at the beginning of the year is worth = $100 at the end of the year

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Savings of $2,000 at the beginning of the year is worth:

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a. realize an economic profit in the long run.

Explanation:

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This ultimately implies that, when there are barriers to entry it may result in monopolistic competition among the sellers of goods having no close substitutes. These barriers consist of economies of scale, network externalities, copyright law, trademark, patent, governmental policies etc.

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