Search results
Dec 2, 2023 · Fiat money is physical money—paper or coins—while representative money is a check or other form of currency that can be exchanged for physical money in a stated amount.
Representative money or receipt money is any medium of exchange, printed or digital, that represents something of value, but has little or no value of its own (intrinsic value). Unlike some forms of fiat money (which may have no commodity backing), genuine representative money must have something of intrinsic value supporting the face value .
Oct 16, 2023 · Paper money that can be exchanged for a specific quantity of a precious metal, typically gold or silver, is known as representative money. Due to its low weight and the ability to print much larger denominations that weigh no more than a single unit of currency, paper money is practical.
Representative money, on the other hand, is a form of currency that represents the intent to pay. The most widely used representative money example is a basic cheque. Apart from cheques, there are a few other types of representative money. These include credit cards, money orders and bank drafts.
Representative money is paper currency that can be exchanged for a fixed amount of a valuable commodity, usually gold or silver. Paper currency is convenient because it weighs little and much larger denominations can be printed that weigh no more than single units of currency.
Nov 21, 2023 · Representative money is an item such as a token or piece of paper that has no intrinsic value, but can be exchanged on demand for a commodity that does have intrinsic value.
Sep 10, 2019 · With representative money, the value of money is tied to a physical good, so the value of the money is directly dependent on how much of that physical resources there is. So if resource production is low, then the value of the money falls because it is a smaller portion of that resource.
Learn about the three main functions of money, how commodity money differs from representative money, and how both differ from today's fiat money.
By ‘representative money’ we are simply talking about a common currency that is in use as legal tender, but that is also backed-up by a valuable commodity (typically gold or silver).
Key Takeaways. Fiat money is physical money backed by a government and is considered legal tender. Representative money is backed by a physical commodity such as precious metals or instruments like checks and credit cards. Prior to 1971, the world's currencies were representative, backed by gold.
