What kind of money is a gold certificate considered to be?

What kind of money is a gold certificate considered to be?

A. commodity

B. fiat

C. representative

D. currency

Answer: C. representative

Representative money, on the other hand, is the type of money that gets its value from the certain commodity that it represents and which people take to the market to exchange for other goods and services. In this mechanism, the government or the central bank would issue a gold certificate to the holder to show that he owned a certain amount of gold stored in the issuer’s treasure. On demand these certificates could be exchanged for pure gold for an equivalent value of the certificates issued.

Representative money on the other hand is the money that gives title to the commodity, for instance certificate that represents the actual commodity such as the gold coins. Moreover, it differs from fiat money that is money whose value is not backed by anything physical or by gold and from currency as being a wider term for money circulating at any given time.