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Answer to Question #51396 in Macroeconomics for Yoyo

Question #51396
Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate.
Because it is no longer backed by the potential for conversion to gold, modern Canadian fiat currency is no longer able to serve as a form of money.
Expert's answer
False. Canadian fiat currency differs from commodity and representative money. 
Commodity money is based on a good, often a precious metalsuch as gold or silver, which has uses other than as a medium of exchange 
Representative money  is a claim on the commodity rather than the actual good. Fiat money derives its value from government regulation or law.

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