What is money? Why is modem money currency accepted as a medium of exchange?
OR
Why is modem currency accepted as a medium of exchange without use of its own? Find out the reason.
MONEY is something that can act as a medium of exchange in transaction.
Modem forms of money are paper notes and coins.
- Currency is accepted as a medium of exchange because it is authorised by the government of the country.
- In India, the Reserve Bank of India issues currency notes on behalf of the Central government.
- As per Indian law, no other individual or organisation is allowed to issue currency.
- The law legalises the use of rupee as a medium of payment that cannot be refused in setting transaction in India.
- No individual in India can legally refuse a payment made in rupees.