GK
BANKING AWARENESS AND SEBI
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Backed by bullion or silver
|
|
|
Accepted by abroad banks only
|
|
|
Decreed as income by a government
|
|
|
Accepted during a moment in lieu of gold
|
Detailed explanation-1: -Legal tender refers to any currency that is declared as legal by the government while fiat money is referred to as money that is not backed up by any physical commodities such as gold. They are backed by the government.
Detailed explanation-2: -The gold standard means, that a currency has fixed value directly linked to gold, and it is convertible into gold. Fiat money is not backed by anything. It gives central banks control to print as much money as they want.
Detailed explanation-3: -Paper money has perceived monetary advantages over gold-backed assets. Specifically, because it gives good economic control to the government. It could help in taming inflation, and provide enough supply of cash to the market. Moreover, fiat money is easier to distribute and use in daily transactions.