Question #311

Under a fiat monetary system, the absence of currency convertibility means

• there is no reason for people to hold currency as a hedge against gold price falls.
• that the government can motivate people to exchange goods and services in return for public spending by fining anyone of working age who walks down the street.
• that the currency is only convertible into government bonds rather than gold.

Answer #2146

Answer: that the government can motivate people to exchange goods and services in return for public spending by fining anyone of working age who walks down the street.

Explanation

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