ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Fiat Money and Legal Tender: The form of money that is issued by the government and is not backed by any commodity is known as fiat money. Ex: INR, Dollar, Pounds, etc. The term legal tender states the money that is legally issued by the government. Ex: Coins and Banknotes.

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: -Fiat money is currency that has the government backing and is declared by it to be legal tender. It is not backed by a physical commodity and thus doesn’t have any intrinsic value.

Detailed explanation-4: -A fiat money is a type of currency that is declared legal tender by a government but has no intrinsic or fixed value and is not backed by any tangible asset, such as gold or silver.

Detailed explanation-5: -Fiat money is a form of currency that is declared legal tender. This includes money in circulation such as paper money or coins. Fiat money is backed by a country’s government instead of a physical commodity or financial instrument.