define fiat and fuduciary money
and full bodied and credit money
Fiat money derives its value only because of government order (fiat). The currency becomes fiat money when the government declares it to be the legal tender. This money does not have intrinsic value, i.e. the real value is not equivalent to the face value printed on the notes and coins.
Fiduciary money refers to the non-legal tender money which is generally accepted as money on the basis of trust that their issuer commands. Thus, it is fiduciary money because acceptance of such money is not legal but optional. It consists of instruments such as cheques, drafts,etc.
Full bodied money refers to that money whose intrinsic value (value of the metal) is equal to the face value of the engraving on the currency.
Credit money refers to that money whose claim is falling due in future. Nowadays, individuals frequently use credit money in the form cheques, drafts, credit cards etc.
Fiduciary money refers to the non-legal tender money which is generally accepted as money on the basis of trust that their issuer commands. Thus, it is fiduciary money because acceptance of such money is not legal but optional. It consists of instruments such as cheques, drafts,etc.
Full bodied money refers to that money whose intrinsic value (value of the metal) is equal to the face value of the engraving on the currency.
Credit money refers to that money whose claim is falling due in future. Nowadays, individuals frequently use credit money in the form cheques, drafts, credit cards etc.