explain the difference between fiat money and legal tender money in tabular form. With easy e.g
Dear student,
| Fiat money | legal tender money |
| Fiat money derives its value only because of government order (fiat) | Legal tender refers to the currency notes and coins being issued by the monetary authorities of India (RBI and government of India) as a legal medium of payment. . |
| 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 | On the other hand, the currency issued by the Monetary Authority is also known as Legal Tender Money. |
| For example,a Rs 100 currency note, if not backed my RBI and Government are referred as fiat money | if the same currency notes & coins are backed by RBI and government by providing the person having those currency notes with the purchasing power equal to the face vale of Rs 100, then it will be referred as legal tender money. |
Regards