ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Legal tender is something which is acknowledged by the laws as a mechanism to settle a private or public debt or in order to meet a fiscal responsibility which includes paying taxes, abiding by contracts, and finally damages or fines. Almost every country uses its national currency as legal tender.

Detailed explanation-2: -Legal Tender: Legal tender refers to the money which can be legally used to make payments of debts or other obligations. Fiat money: Fiat money refers to the money which is backed with the order of the government under law. It must be accepted for all debts.

Detailed explanation-3: -Legal Tender refers to all U.S. coins and currency that issued by the government. U.S. Cash dollars are also a valid form of legal tender. Nonetheless, federal statutes do not require a seller to accept cash as a form of legal tender for payment of goods or services that were rendered.

Detailed explanation-4: -(i) Legal Tender Money is the money that is backed by law and refusal to accept will be punishable by law. (i) Non-legal tender money is the money that is generally used by people but there is no legal compulsion to accept it. (ii) It is issued by the Central bank of the country. (ii) It is issued by commercial banks.