Currency is accepted as a medium of exchange because __________.
(i) It is
accepted as a medium of exchange because the currency is authorised by the
government of the country.
(ii) In
India, the Reserve Bank of India issues currency notes on behalf of the Central
Government.
(iii) As per
Indian law, no other individual or organisation is allowed to issue currency.
(iv)
Moreover, the law legalises the use of rupee as a medium of payment that cannot
be refused in settling transactions in India.
(v) No
individual in India can legally refuse a payment made in rupees. Hence this
rupee is widely accepted as a medium of exchange.