Which of the following is not true about currency notes and coins in circulation in an economy ?

They have intrinsic value

The correct answer is option (3) : They have intrinsic value

Currency notes and coins are considered fiat money, which means they are issued by the government and are not backed by a physical commodity (such as gold or silver). Fiat money derives its value from the trust and confidence people have in the issuing authority (typically the government or central bank). Therefore, statement (C) stating that currency notes and coins have intrinsic value is not true.

They are legal tenders: Currency notes and coins issued by the central bank (or in some cases, the government) are legal tenders, which means they are recognized by law as a valid means of payment for goods and services within the country. Accepting legal tender in payment of debt is mandatory.

They are called fiat money: Fiat money is currency that a government has declared to be legal tender, despite not being backed by a physical commodity. Currency notes and coins in most modern economies are fiat money. Their value is derived from the trust and confidence people have in the government's ability to maintain their value and acceptability.

They do not have intrinsic value: Currency notes and coins do not have intrinsic value in the sense that their value is not based on the material they are made of (like gold or silver). Instead, their value is purely nominal and derived from the faith and credit of the issuing authority (the government or central bank).