Forms of Money -
1. Fiat money: Fiat money is the money which is backed by the authority or order of the government. It is also known as the legal tender of the country. It includes currency notes and coins. In India 'RUPEES‘ issued by RBI and Central Government is fiat money.
2. Fiduciary money: Fiduciary money is the money which is backed by mutual trust between the payer and the payee. For example, Cheque is accepted by a person on the basis of trust between the parties, not by the order of government.
3. Full-bodied money: Full-bodied money is the money in terms of coins whose commodity value is equal to the money value as & when these are issued. Example: If a coin of Rs.10 is made up of silver of Rs.10 then the money value of the coin is equal to the commodity value of the coin.
4. Credit money: Credit money is the money in which monetary value is more than commodity value. Credit money is also known as representative money. Example: If the coin of Rs.10 is made up of metal of Rs.2, then the money value of such coin is more than the commodity value of the coin.
1. Fiat money: Fiat money is the money which is backed by the authority or order of the government. It is also known as the legal tender of the country. It includes currency notes and coins. In India 'RUPEES‘ issued by RBI and Central Government is fiat money.
2. Fiduciary money: Fiduciary money is the money which is backed by mutual trust between the payer and the payee. For example, Cheque is accepted by a person on the basis of trust between the parties, not by the order of government.
3. Full-bodied money: Full-bodied money is the money in terms of coins whose commodity value is equal to the money value as & when these are issued. Example: If a coin of Rs.10 is made up of silver of Rs.10 then the money value of the coin is equal to the commodity value of the coin.
4. Credit money: Credit money is the money in which monetary value is more than commodity value. Credit money is also known as representative money. Example: If the coin of Rs.10 is made up of metal of Rs.2, then the money value of such coin is more than the commodity value of the coin.
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