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What is money? Why is modern money currency accepted as a medium of exchange?

Answer»

Money is anything which has common acceptability as a means of exchange, a measure and a store of value. 

Modern money has been accepted as a medium of exchange because:

  • It is authorised by the government of a India. 
  • It is issued by the apex bank on behalf of the government. 
  • No other individual is allowed to issue currency.
  • The law of the country legalises its use as a medium of payment and setting transactions. 
  • No one in a country can refuse payment made in the currency of that country.


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