Homework Answers
4.
Answer: True
Fiat money has inherent value, since its value is maintained by the government; it is not backed by any other commodity like gold or silver.
Commodity money is backed by various commodities, like gold, food items, or even Italian car.
5.
Answer: 3rd option
This organization issues identification code to music in order to protect that music. The need of holding money would be very low there, since very few purchases are conducted – these are purchasing stationery, stamps, etc.
Therefore, the transaction motive is very small.
Apart from this option all others have huge transaction motive.
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