Chapter 46: Token Coinage and Government Paper Money

1. Define legal-tender as applied to money. What is meant by fiat money?

2. Show the difference between convertible and inconvertible money.

3. The government of the island of Guernsey having no money, issued paper-notes to pay for the building of a market. They circulated and were gradually taken up as the market earned its cost, during ten years. When they were all redeemed and burned, the island had the market free of cost. Explain how this could be done. (This is from Sumner's _Problems in Political Economy_.)