ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Legal tender is officially defined as the coins or banknotes that must be accepted if offered in payment of a debt.

Detailed explanation-2: -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-3: -Legal tender is the national currency, such as paper money and coins, that is declared by law to be valid payment for debts and financial obligations.

Detailed explanation-4: -Bills of exchange, bank drafts, postal orders, and cheques are examples of non-legal tender money. These types of money are usually accepted but legally there is no obligation to accept them. Whether it is accepted or not is the choice of lender, seller or creditor.