Answer to Question #51253 in Macroeconomics for bob

Question

State True, False or Uncertain. 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.

Answer 1

False. In spite of the impossibility to be backed by the potential for conversion to gold, modern Canadian fiat currency is longer able to serve as a form of money, because it can perform all the functions of money (can be used for buying and selling goods and services, s the common standard for measuring relative worth of goods and service etc.)