The Advantages And Disadvantages Of Fiat Money

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First of all, the advantages of fiat money are that it is economical. It substitutes a less expensive material than metal for money and conserves the metal for the arts. Metal has various usage such as it can be used as to make furniture or sculpture. It is such a waste to just use it as money and transfer around the people. Metal today is very limited and getting lesser so we must use it wisely or else it will be no more. On the other hand, fiat money is in a larger amount than the metal and it is not limited. As a result, using fiat money if better than using metal as a money. Other than that, the process of making the fiat money is easier than the metal. The printing process of fiat money is easy and quick. The printing press is more expeditious than the mine and smelter. The process of mining is very complicated and not easy. It involved a lot of workers to do it. It also takes up a lot of time to do it just to find the metal. The mining spot is not everywhere and it only specific to some area only. As a conclusion, the process of making the fiat money is easier and save time than the process of finding the metal by mining and smelting. Furthermore, fiat money is more convenient to be used than the metallic money. Fiat money is very light in weight. It has the same weight as a piece of paper. The weight does not increase…show more content…
First of all, the disadvantages of fiat money are circulation of paper money is only limited to the country that issuing it. As for international settlements, fiat money cannot be used. Therefore, the value depends on the accidents of a limited area. Fiat money is more subject to fluctuation than that of metallic money. As compare to the metallic money or gold, the gold is accepted internationally by all the country. The gold is steadied by the equalizing tendencies of parts of a broad area. As a result, metallic money or gold is better as it is accepted internationally comparing to the fiat

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