Match each form of money listed in Column A with its defining characteristic or legal attribute in Column B.
- Token MoneyMoney whose declared face value substantially exceeds the intrinsic material cost of producing it
- Fiat MoneyCurrency issued by government decree without physical commodity backing
- Legal TenderA medium of exchange that creditors are legally bound to accept when offered in settlement of monetary debts
- Near Money (Quasi-Money)Liquid financial instruments easily convertible to cash but not directly usable for day-to-day transactions
Answer
Token Money matches with money whose declared face value substantially exceeds its intrinsic material cost; Fiat Money matches with currency issued by government decree without physical commodity backing; Legal Tender matches with a medium of exchange that creditors are legally bound to accept for debt settlement; Near Money matches with liquid financial instruments easily convertible to cash but not directly usable for transactions.
Each monetary form is matched according to its fundamental commercial definition: Token Money has a face value above its metallic/intrinsic cost; Fiat Money is established by state decree without physical reserves; Legal Tender is legally compulsory for settling monetary debts; Near Money consists of liquid financial instruments that act as store of value but require conversion to cash before spending.
Step-by-Step Solution
Key Concept
Distinction and Attributes of Forms of Money