Look at a 10 Rupee note. What is written on top? Can you explain this statement?
On the top of a 10 Rupee note “Reserve Bank of India, Guaranteed by the Central Government is written.”
It implies that the notes are issued by Reserve Bank of India on behalf of the Central Government. This means that the currency is authorised or guaranteed by the Central Government and no one can refuse payment made in it.
In situations with high risks, credit might create further problems for the borrower. Explain.
How does money solve the problem of double coincidence of wants ? Explain with an example of your own.
How do banks mediate between those who have surplus money and those who need money?
Why do we need to expand formal sources of credit in India?
