Money banking Unit 1 - Unit1 1 FiatMoneypg12 ,...

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Unit 1 1. Fiat Money pg12 Currency that a government has declared to be legal tender, despite the fact that it has no  intrinsic value and is not backed by reserves. Historically, most currencies were based on  physical commodities such as gold or silver, but fiat money is based solely on faith. Investopedia Says: Most of the world's paper money is fiat money. Because fiat money is not linked to physical  reserves, it risks becoming worthless due to hyperinflation. If people lose faith in a nation's  paper currency, the money will no longer hold any value. 2. Legal tender e°°° ; °° 3. Negotiable instrument ee A transferable , signed document that promises to pay the bearer a sum of money at a future date or on demand . Examples include checks , bills of exchange , and promissory What are Negotiable Instruments of Deposit? It is a negotiable bearer receipt issued by an approved Commercial or Investment Bank as evidence of a deposit placed with it for a fixed tenor (ee ) at a specified fixed rate if interest.
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