Which of the following statements accurately describes the relationship between commodity money and fiat money?
A. Both commodity money and fiat money require a free-market
system.
O B. Commodity money has value in itself while fiat money has value
only because it is given value.
O C. Fiat money only has value if commodity money is a precious metal
such as gold
O D. Neither type of money can be used for any purpose other than as a
medium of exchange.

The correct answer is B. Commodity money has value in itself, while fiat money has value only because it is given value.

Explanation:

Commodity money includes elements such as silver, gold, alcohol, or tea that have a value in themselves because they are considered goods; but can also be used to obtain other goods or services. For example, in Ancient China, tea could be used to obtain other goods.

On the other hand, fiat money such as regular coins or dollars, has value because the government establishes its value, and similar to commodity money, it can be used to obtain goods and services. Thus, the option that best explains the difference between these two concepts is B.

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