Definition of Fiat Money- Currency backed by Government guarantee

Q.  What is 'fiat money'?
- Published on 20 Jul 15

a. The currency backed by Government Guarantee
b. The currencybacked by tangible assets
c. The currency backed by gold reserves
d. The currency backed by budgetary support

ANSWER: The currency backed by Government Guarantee
 
A fiat-money currency generally loses value once the issuing government or central bank either loses the ability to or refuses to further guarantee its value.

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