Chapter 13, Problem 5P

To determine

The meaning of the statement −“the better fiat money assists as a store of value, the more acceptable it is”. Also, the reason behind people losingconfidence in money.

Concept Introduction:Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. Fiat money only has value because the government maintains that value, or because two parties agree on said value. A store of value is that function of money which can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved