Question

he kinds of money Personal possession of currency is prohibited in U.S. prisons, although, in practice, prisoners still exchange goods and services. Until 2003, the year in which the U.S. government banned smoking in federal penitentiaries, cigarettes were the preferred medium of exchange among prisoners. One important difference between using cigarettes and using dollars as money is that (cigarettes / U.S. dollars)? have intrinsic value. U.S. dollars are an example of (fiat / commodity)? money.

Answer 1

Answer:

A) One important difference between using cigarettes and using dollars as money is that cigarettes have intrinsic value.

B) U.S. dollars are an example of fiat money.

Explanation:

Prisioners had two uses for cigarettes: they could use them as a medium of exchange, thus acted as money, and they could use cigarettes to smoke. Therefore the intrinsic value of cigarettes would be the tobbacco which is used to smoke, as opposed to U.S. dollars where its intrinsic value is just the paper or metal if it were a coin.

U.S. dollars are an example of fiat money because it's a currency that has been established as legal tender by the U.S. Government, but it has no intrinsic value of its own.