Final answer:
The difference between standard and fiat currency lies in their value and backing. Standard currency has intrinsic value based on its material composition, while fiat currency has no intrinsic value and derives its value solely from the government's declaration.
Step-by-step explanation:
The difference between standard and fiat currency lies in their value and backing. Standard currency, also known as commodity money, has intrinsic value based on its material composition. For example, gold and silver coins have value beyond their use as money due to their properties and uses in various industries. On the other hand, fiat currency has no intrinsic value and derives its value solely from the government's declaration that it is legal tender. Its backing is based on the trust and confidence of the people in the currency's value.