What is commodity money?

It's called commodity money. Let's see, commodity money. And basically what this means is that the thing that you're using for money, the thing that you're trading around, has some value in it's own right. Even if it wasn't money, it would still be something valuable.

What is commodity backed money?

Commodity-backed money is a type of currency guaranteed by a physical commodity, such as gold or silver. The idea behind commodity-backed money is that the currency is backed by something tangible, which provides stability and confidence in the currency. In the past, commodity-backed money was common.

Why is commodity backed money important?

Commodity-backed money can help promote price stability and reduce inflation, as the value of the currency is linked to the value of a physical commodity. But Commodity-backed money can limit a government's ability to manage its currency in response to economic changes. There are several types of commodity-backed money, including: Gold standard.