Difference between revisions of "Fiat money"
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| − | '''Fiat money''' is [[currency]] that is valuable only because it has been declared as such by a governing body. It is not backed by [[precious metal]] or any other resource. Fiat money's value is dependant on [[scarcity]]; [[inflation]] occurs when excessive fiat money is produced. The [[U.S. Dollar]] is an example of fiat money. | + | '''Fiat money''' is [[currency]] that is valuable only because it has been declared as such by a governing body. It is not backed by [[precious metal]] or any other resource. Fiat money's value is dependant on [[scarcity]]; [[inflation]] occurs when excessive fiat money is produced. The [[Dollar (U.S.)|U.S. Dollar]] is an example of fiat money. |
Revision as of 02:25, January 2, 2010
Fiat money is currency that is valuable only because it has been declared as such by a governing body. It is not backed by precious metal or any other resource. Fiat money's value is dependant on scarcity; inflation occurs when excessive fiat money is produced. The U.S. Dollar is an example of fiat money.