What is fiat money? Why is fiat money important in the United ...

[stevenposner]

What is fiat money? Why is fiat money important in the United States today?

Question 2

The economic theory that suggested an alternative to the rising unemployment and inflation that the static Phillips curve analysis could not explain was the:
 a. new classical economic theory.
  b. monetarist economic theory.
  c. new Keynesian economic theory.
  d. classical economic theory.
  e. traditional Keynesian economic theory.

[mcarey591]

Answer to Question 1

Fiat (from the Latin for let it be done) money is money, which is decreed to be acceptable as payment, regardless of backing with gold, silver, or other precious metals. Money in circulation in the United States (and many other nations) today is almost entirely fiat money. Fiat money has value as long as people are willing to accept it as payment for goods and services.

Answer to Question 2

a