Why does Fiat money differ from commodity money?

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2026-07-20 19:20

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Fiat money differs from commodity money because it is a more convenient form of money. It is easier to carry around paper money that it is to carry around gold or silver or other commodities.

Fiat money is a promise to pay in the future while commodity money derives its value from the commodity of which it is made.

Fiat money has value because the government declares that it has value. Fiat money only has value as a medium of exchange.

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