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| 1. |
What are the modern forms of money?? |
| Answer» As the need for a medium of exchange became a necessity different materials were used as a medium of exchange. Initially Indians\xa0used grains and cattle as money. Before the introduction of coins, a variety of objects was used as money. Thereafter came the use\xa0of metallic coins — gold, silver, copper coins — a phase which continued well into the last century.\xa0As time progressed, trade increased and a global market was created. With the global market came the need for a more convenient medium of exchange. Thus was born the modern forms of money - paper notes (currency) and coins. Modern currency is not made of precious metal such as gold, silver and copper. And unlike grain and cattle, they are neither of every day use. The modern currency is without any use of its own. Still, it is accepted as a medium of exchange because the currency is authorized by the government of the country. In India, 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. As also no individual in India can legally refuse a payment made in rupees. Hence, the rupee is widely accepted as a medium of exchange. | |