Which of the following is an example of representative money?

• A. Silver certificate
• B. Gold coin
• C. Federal Reserve note
• D. Digital cryptocurrency token

Answer: (A)

Representational money is money that itself has little intrinsic value but can be exchanged for a specific amount of a commodity held in reserve. The key idea is that the value of the paper comes from the claim it represents, not from the material of the paper itself.

A silver certificate fits this perfectly because it is a paper certificate that represents a claim to a certain amount of silver held by the government. Holders could redeem the certificate for silver, so its value rests on that backing rather than on the paper alone.

In contrast, a gold coin is money made of gold and derives value from the metal it contains (commodity money). A Federal Reserve note is fiat money, meaning its value comes from government decree and general acceptance, with no promise of redeemability for a specific commodity. A digital cryptocurrency token isn’t representative money because it isn’t a claim to a tangible commodity held in reserve or a government-backed promise of redemption. Its value is determined by market factors and trust in the issuer.