Western Governors University (WGU) ECON2000 D089 Principles of Economics Practice Exam

A currency that has value from its use as something other than money is classified as commodity money. This type of money is based on a physical commodity that has intrinsic value; for example, gold, silver, or other materials that have value outside of their use as currency. The key characteristic of commodity money is that it retains value due to its inherent properties or its utility in other applications, rather than just its function in facilitating transactions.

In contrast, fiat money is government-issued currency that does not have intrinsic value and is not backed by physical commodities. Its value comes from the trust and confidence of the people who use it. Intrinsically valuable refers to the inherent worth of an object, but this term is not specifically classified under a monetary system. Representative money, on the other hand, is a type of currency that represents a claim on a commodity, such as a certificate that can be exchanged for a specific amount of gold or silver. However, it does not have value from its use as something beyond its role as money.

Thus, the classification of currency possessing value from alternate uses is accurately described as commodity money.