How does the U.S. dollar differ from money used in the past?
a- the U.S. dollar has intrinsic value
b- the U.S dollar has no intrinsic value but is redeemable for a valuable good
c- the U.S. dollar has no intrinsic value
d- the U.S dollar has intrinsic value and is redeemable for a valuable good
c- the U.S. dollar has no intrinsic value
The U.S. dollar is a fiat currency, which means it is not backed by a physical commodity like gold or silver. It derives its value from the trust and confidence of the people using it as a medium of exchange. In the past, many currencies were backed by a specific commodity, such as gold or silver, giving them intrinsic value. However, the U.S. dollar is not redeemable for any specific valuable good like gold or silver.
The correct answer is c- the U.S. dollar has no intrinsic value. In the past, money was often made from valuable materials like gold or silver, which had intrinsic value. However, the U.S. dollar is a fiat currency, which means it is not backed by a physical commodity like gold. Instead, it derives its value from the trust and confidence placed in the U.S. government and its economy. The U.S. dollar is widely accepted as a medium of exchange, but it does not have any inherent value outside of that.
To determine how the U.S. dollar differs from money used in the past, we need to understand the characteristics of the U.S. dollar and compare it to historical forms of money.
The U.S. dollar is a fiat currency, which means that it has no intrinsic value. In other words, the value of the U.S. dollar is not backed by a physical commodity like gold or silver. This distinguishes it from historical forms of money such as gold coins or silver coins, which had intrinsic value because they were made of precious metals.
Therefore, we can eliminate options a and d from the choices provided.
Moving on, the U.S. dollar is not redeemable for any valuable good, such as gold or silver, by the U.S. government. In the past, some currencies, like the gold standard, were redeemable for a specific amount of gold or silver. However, after the U.S. dollar moved away from the gold standard in 1971, it became completely disconnected from any physical backing. As a result, we can also eliminate option b.
This leaves us with option c: The U.S. dollar has no intrinsic value. This is the correct choice, as it accurately describes the nature of the U.S. dollar and differentiates it from historical forms of money.