What is fiat money

Fiat Money – Fiat is a Latin word, which means 'let there be'. Fiat money refers to any currency lacking intrinsic value (without back up of gold or silver or any other reserves) that is declared legal tender by a government. It is any money backed by the order of government to act as money. People have to accept it in exchange for goods and services and for discharge of debt.. It is also called legal tender as it circulates in country on government's order.

Ex - Dollar, they are just pieces of paper printed with symbols - they have no intrinsic value of their own. They only become valuable when the government decrees that they have worth

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