Question

When prisoners use cigarettes or some other good as money, cigarettes become

a. commodity money, but do not function as a unit of account.
b. commodity money and function as a unit of account.
c. fiat money, but do not function as a unit of account.
d. fiat money and function as a unit of account?

Answer 1

When prisoners use cigarettes or some other good as money, cigarettes become commodity money and functions as a unit of account.

Commodity money is money where the value comes from a commodity of which it is made. Commodity money is defined as money in which objects have value within themselves.