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    Question

    Which statement correctly describes "fiat

    money"?
    A Currency backed by a physical commodity like gold or silver. Correct Answer Incorrect Answer
    B Government-issued currency not backed by a commodity. Correct Answer Incorrect Answer
    C Currency whose value is determined by international trade agreements. Correct Answer Incorrect Answer
    D Currency affected by geopolitical events. Correct Answer Incorrect Answer

    Solution

    Fiat money is currency issued by governments that is not backed by any physical commodity but rather relies on the trust and authority of the issuing government.

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