Fiat money is currency lacking intrinsic value, unsupported by commodities like gold or silver. Its worth stems entirely from confidence in the issuing government.
Examples include government-issued paper currency and coins, such as the Indian Rupee or US Dollar.
Fiduciary money, conversely, derives its value from public trust in the issuing institution. It is not backed by physical commodities but by the issuer's commitment.
Examples of fiduciary money are checks, promissory notes, and other financial instruments accepted as currency due to trust in the issuer.
Option D is inaccurate because fiat money is not exchangeable for gold or silver, unlike during the gold standard era.