why is fiat currency more vulnerable to dramatic economic shifts than currency on the gold standard? (1…

why is fiat currency more vulnerable to dramatic economic shifts than currency on the gold standard? (1 point) fiat currency is generally used in countries with weak economies. fiat currency is backed by silver, which is less valuable than gold. fiat currency is backed by the government, so it is not as stable as gold. fiat currency includes government bonds and the gold standard does not.

why is fiat currency more vulnerable to dramatic economic shifts than currency on the gold standard? (1 point) fiat currency is generally used in countries with weak economies. fiat currency is backed by silver, which is less valuable than gold. fiat currency is backed by the government, so it is not as stable as gold. fiat currency includes government bonds and the gold standard does not.

Answer

Brief Explanations:

Fiat currency's value is based on government - trust and economic policies. In contrast, currency on the gold standard has a tangible asset (gold) backing it. When economic conditions change, the government's ability to support the fiat currency can be questioned, leading to greater vulnerability. Fiat is not backed by silver, and its use is not limited to weak - economy countries. Also, the inclusion of government bonds is not the main reason for its vulnerability compared to the gold - standard currency.

Answer:

Fiat currency is backed by the government, so it is not as stable as gold.