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.

  • 3
Fiat means government issued and accepted all over the country.
Fiduciary money is money which is exchanged only on the basis of trust between two persons egcheques.
Full bodied money means money whose face value equals commodity value. Eg. If a gold coin is costing Rs. 200 and of the same amount gold is used in it.
Credit money implies money whoseintrinsic value is more than the commodity value. Eg. Paper currency
  • 4
fiat money is the money which is officially issued and authenticated by thegovernment of the country , for eg, currency notes and coins.....whereas fiduciary money is accepted only on the connection of mutual trust by the issuer, for eg cheques money can never be rejected whereas fiduciary money may or may not be accepted........

PS: wish me luck...its my economics exam tomorrow......;)
  • 2
What are you looking for?