True of false: paper currency was a symbol representing the gold, silver, and the government promise to pay

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History

Ian Gilmore

20 May, 09:57

True of false: paper currency was a symbol representing the gold, silver, and the government promise to pay

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Denzel Bird · Answer 1

TRUE, the Gold Exchange Standard is a monetary system in which gold is taken out of the market and instead given notes or certificates (paper) as a type of currency/symbol that at any moment you could exchange for gold with the government, this system was abandoned by most nations by the 20th century, but most of them still keep gold as part of their guarantee and support to their national currency

Heaven Haley · Answer 2

True.

Monetary history shows us that at first the exchanges that were made by barter were replaced by precious metals. Over time, there was the introduction of paper money, which should necessarily be backed by some metal with government guarantee. If it were necessary, the paper money would be exchanged for the metal in it.

Nowadays, the concept of fiduciaridade of the currency has been agreed. This means that there is enough confidence in the Government that there is no need for mandatory conversion. Thus, the currency is backed by the trust that citizens have with their government.