Commodity money A. has little to no value independent of its use as money. B. is backed by a valuable commodity such as gold. C. can be used to purchase commodities, but not services. D. has value independent of its use as money.
Business · High School · Sun Jan 24 2021
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Commodity money refers to money that derives its value from a commodity or an item that has intrinsic value. Based on your options:
A. has little to no value independent of its use as money: This doesn't accurately describe commodity money. Commodity money does have value beyond its use as a medium of exchange.
B. is backed by a valuable commodity such as gold: This accurately defines commodity money. It's money that is backed by or directly made of a valuable commodity like gold or silver.
C. can be used to purchase commodities, but not services: This doesn't accurately describe commodity money. Commodity money can be used to purchase both goods and services.
D. has value independent of its use as money: This is not entirely true for commodity money. The value of commodity money is somewhat tied to its use as money, but it also has inherent value due to the underlying commodity it represents.
So, the correct definition for commodity money is B. is backed by a valuable commodity such as gold.