Paper notes and coins have no use of their own. Why, then, is modern currency accepted as a medium of exchange?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Authorised by the government of the country
Modern currency is accepted as a medium of exchange because it is authorised by the government. In India the Reserve Bank of India issues currency notes on behalf of the central government, and no individual in India can legally refuse a payment made in rupees.