Question

With reference to money, which one of the following statements is correct?

Options

• All paper currency is inconvertible money.

• Cheque is also a fiat money.

• Money cannot transfer value from one person to another.

• M₂ = C + DD + OD

Answer 1

All paper currency is inconvertible money.

Explanation:

It suggests that money cannot be converted into gold or other precious metals. It is not the responsibility of the issuing government to transform paper notes into gold coins.