Asked by Jadyn Quinn on Jun 11, 2024
Verified
When the Soviet Union began breaking up in the late 1980s, cigarettes began replacing the ruble as the medium of exchange even though the ruble was legal tender. The cigarettes provide an example of commodity money.
Commodity Money
Money that has intrinsic value and can be used for purposes other than as a medium of exchange, such as gold or silver.
Legal Tender
The government-mandated currency that must be accepted as payment for debts.
Ruble
The official currency of Russia, symbolizing the country's economic activity.
- Identify the historical significance of commodity money and its distinguishing features when contrasted with fiat money.
Verified Answer
LS
Logan StolbergJun 14, 2024
Final Answer :
True
Explanation :
Cigarettes served as a form of commodity money because they were used as a medium of exchange due to the instability and lack of trust in the ruble during the economic turmoil of the Soviet Union's collapse.
Learning Objectives
- Identify the historical significance of commodity money and its distinguishing features when contrasted with fiat money.