Why currency is accepted as a medium of exchange. 3 points or 3 sentences
Answers
(i) It is accepted as a medium of exchange because the currency is authorised by the government of the country.
(ii) In India, the Reserve Bank of India issues currency notes on behalf of the Central Government.
(iii) As per Indian law, no other individual or organisation is allowed to issue currency.
(iv) Moreover, the law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India.
(v) No individual in India can legally refuse a payment made in rupees. Hence this rupee is widely accepted as a medium of exchange.
For the following reasons currency is accepted as a medium of exchange:
1. It is recognized by the government of India.
2. Money works as a store of value, and as a unit of account.
3. According to Indian Law, no other individual or organization is authorized to issue currency.
4. Besides, the statute authorizes the practice of rupee as a means of payment that may not be denied in making transactions throughout India.