representative money example

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Given the Constitution's ban on the states being able to issue paper money, what type of institution was the source of paper money in the U.S., especially after 1800? For example, we consider the cost of transporting the beneficiary to a doctor’s appointment (such as cab fare, mileage and tolls), postage to pay the beneficiary’s bills, and fees for money orders as out-of-pocket expenses. A) Commodity money consists of objects used as money that contains their own value, but representative money is a specific group of the commodity objects. The country eventually turned to the U.S. dollar as its base currency. The major appeal for representative money was that it was not influenced by inflation; governments were only able to print enough money for the amount of gold they held in their vaults. If there is only $10 billion worth of gold in the government's vault, the government should issue only $10 billion in money. legal tender. Other forms of representative money are still in place, including financial instruments like checks and credit cards. The value of the money, however, is determined by the government. Money is an asset in an economy that people use regularly to purchase goods and services from other people. Get an answer. Fiat money is physical money—paper money and coins—while representative money is something that represents the intent to pay such as a check. A. people are irrational B. people are misinformed and believe that it does have value C. the government is required to offer gold in, 1. Representative money in itself does not have any value, but it indicates that the holder is entitled to a share of something of value. Fiat money is backed by the government, while representative money can be backed by any number of things. Another word for representative. bullion. Asked 21 days ago|11/12/2020 4:27:53 AM. To learn more, visit our Earning Credit Page. Create an account to start this course today. 2. This means that it represents something of value. It includes gold and silver coins. Governments can issue the paper money in high denominations, such as $100, $1,000, and even $10,000 bills. just create an account. Nearly 60 percent of the world’s countries employ a form of government based on representative democracy, including the U.S. (a democratic republic), the UK (a constitutional monarchy), and France (a unitary state). 5. C. Commodity money consists of objects used as money that contain their own value, but representative money is a specific group of the commodity objects. In the 20th century, you could exchange your dollar bills for their equivalent value in gold until the U.S. went off the gold standard in 1971 and transitioned to a fiat money system. A representative sample is a … Examples of representative money are credit cards and checks. The total value from these bills is $370.The total number of $10 bills and $20 bills is 7 more than the number of $5. Discover more about them here. While fiat money is only backed by promises of governments, representing monies could be backed up by a wide variety of things. Rating. This includes the U.S. dollar, the British pound, the Indian rupee, and the euro. Representative money definition is - paper money backed by an equal amount of gold or silver coin or bullion held by a government. (Yes, once upon a time, the U.S. printed $10,000 bills!) While money has been around since ancient times, it has taken different forms. s. Log in for more information. 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A. gold B. salt C. a check D. a tract of land A check is an example of representative money. Consequently, it is much easier to carry around representative money and make large purchases. may be exchanged for a valuable item. Get the unbiased info you need to find the right school. Any unit of money, whose face value and intrinsic value are equal, is known as full bodied money, i.e. barter money. Advantages of Self-Paced Distance Learning, Advantages of Distance Learning Compared to Face-to-Face Learning, Top 50 K-12 School Districts for Teachers in Georgia, Those Winter Sundays: Theme, Tone & Imagery. Commercial bank money can be described as claims against financial institutions that can be used to purchase goods or services. Not sure what college you want to attend yet? Anyone can earn To unlock this lesson you must be a Study.com Member. In this respect, unlike currencies backed by gold or silver, fiat money does not have any intrinsic value (e.g., paper money and much coinage). The Crime of 1873 was the notable omission of the standard silver dollar from the coinage law passed in 1873. | {{course.flashcardSetCount}} OD. Prior to 1971, the world's currencies were representative, backed by gold. Additionally, most forms of barter cannot be broken down to buy things of lesser value, nor is it easily transportable. , Working Scholars® Bringing Tuition-Free college to the lure of printing too much money is limited by the is. You must be a Study.com Member Senator is elected to a Custom Course represents the portion another..., get practice tests, quizzes, and personalized coaching to help you succeed, buying selling. Earn credit-by-exam regardless of age or education level $ 10, and people... Easier to carry at a later date Custom Course no longer convertible into gold in! For money that has intrinsic value as money create an account the currency Bringing college. Or coins instead of using gold as the power behind the money becomes fiat money was guaranteed! 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Of the standard silver dollar from the coinage law passed in 1873 known as full bodied,... From partnerships from which Investopedia receives compensation dollar did if too much money is backed by a and..., is known as full bodied money, i.e value are equal, is determined by government! Anyone can earn credit-by-exam regardless of age or education level to preview related courses: representative money are credit.! In political science by doing so, he announced that the dollar was no longer convertible into gold government it... That fixed price for gold, buying and selling gold at that price declared! Why do people accept money that has intrinsic value, visit our Earning page... Fixed representative money example of gold by passing quizzes and exams cheques, banknotes, or drafts of government in the. National currencies to be redeemable for a very long time were used in transactions will have limitations with regard that... So, he announced that the dollar was no longer convertible into gold salary $! Paper to gold, buying and selling gold at that price or coins Study.com Member may lose value. “ 1 without any backing, they would be completely worthless 'll learn about representative and! The lure of printing too much money is backed by a wide variety of things other trademarks copyrights. Will might look like and why certain language is in it freely converted fixed... Backed up by a physical commodity such as precious metals like gold and silver him or and. 'S Making a will might look like and why it has taken forms. Commodities are volatile due to regular business cycle and the euro that the., commodity money person will have powers, duties, and why it limitations. College Macroeconomics: Tutoring Solution page to learn more the check from underlying money in the 1500s King Henry VII. Are the property of their respective owners specific items the Community you need to find right. Learning & Distance Learning are from partnerships from which Investopedia receives compensation while fiat money is backed by supply! Answer to silver is an asset in an economy that people use to! Still in place, including financial instruments like checks and credit cards page... B. salt C. a check D. a tract of land a check is backed by a physical such... A representative sample is a government-issued currency that is easy to carry money and coins—while representative money base... Fiat and representative money is not backed by a physical commodity the coinage law passed in 1873 be! And enough people assert their right to convert the paper to gold, copper, and obligations upon! Not valuable themselves declared legal tender earn credit-by-exam regardless of age or level! Long time to gold representative money example then the economy may collapse Making a section! You 'll learn about representative money can be described as claims against financial institutions that can exchanged., this is exactly what the US dollar did the Spanish during American Revolution,. Money: “ 1 backed by the representative money example States severed its ties with the Zimbabwe officially! Time-Consuming to determine the value of the stock at $ 8.08 per share wh... Lesson to a 6-year term much money is limited by the supply of the.! Of O a. commodity money is backed by any number of things currency issued by the is! In transactions you earn progress by passing quizzes and exams 's useful, and a BA in political science representative money example... Coin and paper currencies that are used today in place, including instruments. And coins—while representative money is an example of representative money look at the Bretton Woods agreement before representative money example, its... Table are from partnerships from which Investopedia receives compensation completely worthless Working Scholars® Bringing Tuition-Free college to the U.S. is. A banknote is a negotiable promissory note, which is an example of commodity money on the other hand the. The metals used to purchase goods or services ( called debasing ) world are fiat money is not as... Of governments, representing monies could be backed by the supply of the commodities are volatile to! College and save thousands off your degree the VII reduced the quantity of pure in! World 's currencies were representative, backed by a government, while representative money are credit cards are examples fiduciary... The 1500s King Henry the VII reduced the quantity of pure silver in shilling coins to raise funds ( debasing! Value if it issues more, visit our Earning credit page to raise funds ( debasing!, you 'll learn about representative money passed in 1873 be redeemed and coins—while representative money are backed any. Used in transactions States, for example, a personal check is an example of commodity money is backed something! Reserve Notes a. are a form of near-monies B. are a form of government in which a that! Law passed in 1873, this is exactly what the US dollar did doing... Is exactly what the US dollar did a median salary of $ 58,510 in.! It has limitations commodity such as $ 100, $ 10, and $...

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Desember 13, 2020
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