ECONOMICS
FEDERAL RESERVE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a system in which the basic unit of currency is equivalent to, and can be exchanged for, a specific amount of gold
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currency backed by the FED and issued by commercial banks
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currency that must be accepted for payment of all debts public and private
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a bank that can lend to other banks in times of need, or a “banker’s bank”
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Detailed explanation-1: -This includes both coins and paper money. Legal tender is recognized by means of law as a way to settle a public or non-public debt or meet an economic obligation, including tax bills, contracts, and criminal fines or damage. Coins and notes come under the legal tender of India.
Detailed explanation-2: -"SEC. 3588. United States notes shall be lawful money, and a legal tender in payment of all debts, public and private, within the United States, except for duties on imports and interest on the public debt."
Detailed explanation-3: -Section 31 U.S.C. 5103, entitled “Legal tender, ” states: “United States coins and currency [including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks] are legal tender for all debts, public charges, taxes, and dues."
Detailed explanation-4: -fiat money, in a broad sense, all kinds of money that are made legal tender by a government decree or fiat. The term is, however, usually reserved for legal-tender paper money or coins that have face values far exceeding their commodity values and are not redeemable in gold or silver.