What determines the acceptability of dollar bills as a medium of exchange?

The experience of Argentina in the late 1980s illustrates the point that Show more The experience of Argentina in the late 1980s illustrates the point that even a country with very low inflation rates may have severe economic problems. there is only a very slight link between rates of growth of the money supply and the inflation rate. to be acceptable as a medium of exchange households and firms must believe that money has value and will be acceptable. any money not backed by gold will eventually become worthless. The purpose of diversification is to reduce the brokerage fees involved in managing a financial portfolio. reduce risk. reduce tax liability. increase the liquidity of a financial portfolio. What determines the acceptability of dollar bills as a medium of exchange? The willingness of the U.S. Treasury to redeem dollar bills for gold The publics fear that failing to accept dollar bills will trigger a hyperinflation The willingness of the Federal Reserve to redeem dollar bills for gold Our societys willingness to use green paper notes issued by the Federal Reserve as money Show less

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