| Direction: Q. 1 to 5 |
| Read the following case study and answer the questions. |
| In November 2016, the Government of India declared that old currency notes of Rs. 500 and Rs. 1,000 were no longer legal tender. New currency notes of Rs. 500 and Rs. 2,000 were launched. |
| The public were advised to deposit old currency notes in their bank accounts till 31st December, 2016 without any declaration and upto 31st March, 2017 with the RBI with declaration. The government also allowed exchange of Rs. 4,000 old currency by new currency per person per day. Also, upto 12th December, 2016, old currency was acceptable at petrol pumps, government hospitals and to pay government dues. |
A) It is a legal tender
B) It is a medium of exchange
C) Both [a] and [b]
D) Neither [a] nor [b]
Correct Answer: C
Solution :
Money is something which works as medium of exchange in an economy and has to be a legal tender for its general acceptance.
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