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What is a difference between fiat and commodity money?

Fiat money has a higher intrinsic value than commodity money.

Fiat money allows an economy to easily expand the money supply, whereas it is more difficult to expand the supply of commodity money.

Fiat money resolves the double coincidence of wants, whereas commodity money does not.

Inflation only occurs in an economy that relies on commodity money.

Tying an economy’s money to a commodity has no dangers, whereas the use of fiat money is very dangerous.

Business Economics, Economics

  • Category:- Business Economics
  • Reference No.:- M91669677

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