ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Currency is the most common medium of exchange accepted as a standard by all parties for settling economic transactions.

Detailed explanation-2: -Money is anything that serves as a medium of exchange. Other functions of money are to serve as a unit of account and as a store of value. Money may or may not have intrinsic value. Commodity money has intrinsic value because it has other uses besides being a medium of exchange.

Detailed explanation-3: -Currency and money are mediums of exchange. They are necessary for an economy for efficient trading and boosting the activities related to trade and exchange. Significantly, they have purchasing power, stored value, and common terminology and act as a standard unit measurement.

Detailed explanation-4: -"medium of exchange” and “means of payment.” The former refers to the set of assets in an economy that people regularly exchange for goods and services (a concept of “what"), while the latter is a method that facilitates delivery of money from one to another (a notion of “how").

Detailed explanation-5: -1. It is accepted as a medium of exchange because the currency is authorized by the Government of India. 2. In India, the Reserve bank of India issues currency notes on behalf of the Central Government of India.