Option 1 -> Currency notes and coins issued by government authority with no intrinsic value.
Option 2 -> Refers to wider measure of money supply including deposits and liquid assets.
Option 3 -> Refers to monetary base including currency and bank reserves.
Option 4 -> Refers to M1 money supply, broader than just notes and coins.
Hence, Fiat Money -> Currency notes and coins are called fiat money because they are issued by government decree and declared as legal tender. They have no intrinsic value (not backed by gold or silver) but derive their value from the trust and authority of the government that issues them. Modern economies operate on fiat money systems where the government's declaration makes these notes and coins acceptable as a medium of exchange. -> correct