Correctly identifies disadvantage of fiat money

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Reference no: EM132028715

1. Which of the following statements correctly identifies a disadvantage of fiat money?

It is very expensive to manufacture

It cannot be used for international transactions

It is possible to create counterfeit fiat money

It can be created only in the private sector

2. Inflation affects money by

increasing money's efficiency as a medium of exchange

limiting money's role as a store of value

reducing the supply of money

reducing transactions and search costs

Reference no: EM132028715

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