Diagram Currency Article For Free

The best-known currencies include the U.S. dollar, euro, Japanese yen, British pound and Swiss franc. Currency symbols exist for most currencies, such as $, ?, ¥ or £. The foreign exchange (FX) markets, however, use ISO (International Organization for Standardization) codes to identify currencies.

Currency is the physical paper notes and coins in circulation. By accepting the currency, a merchant can sell his or her goods and have a convenient way to pay their trading partners. There are other important benefits of currency too. The relatively small size of coins and dollar bills makes them easy to transport.

Why Is It Called Fiat Currency? The term is derived from the Latin word fiat, which means a determination by authority?in this case, it's the government that decrees the value of the currency and it isn't representative of another asset or financial instrument such as gold or a check.

Federal Reserve notes are a blend of 25 percent linen and 75 percent cotton. Currency paper has tiny red and blue synthetic fibers of various lengths evenly distributed throughout the paper. It would take 4,000 double folds, forwards and backwards, to tear a banknote.

The correct answer is Fiat Money. Currency notes and coins are called fiat money. They do not have intrinsic value like that of gold or silver coin. Unlike commodity money, fiat money is not backed by any physical commodity instead it is backed by the order or authority of the government.

One can classify currencies into three monetary systems: fiat money, commodity money, and representative money, depending on what guarantees a currency's value (the economy at large vs. the government's physical metal reserves).

A banknote?also called a bill (North American English), paper money, or simply a note?is a type of negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand.