Why is money accepted as a medium of exchange in India?
Money is accepted as a medium of exchange because:
(i)The currency is authorised by the government of the country.
(ii)The Reserve Bank of India issues currency notes on behalf of the Central Government. As per Indian law, no other individual or organisation is allowed to issue currency.
(iii)Moreover the law legalises the use of rupee as a medium of payment that cannot be refused in setting transactions in India.
Explain the functions of money.
Answer the questions asked below:
(i)Why are transactions are made in money?
(ii)Why is money is called a medium of exchange?
(iii)What is the most significant feature of the barter system?
'Cheap and affordable credit is crucial for the development'. Explain.
Why do we need to expand formal sources of credit in India?
