Question

Distinguish between -

Convertible paper money and inconvertible paper money

Answer 1

Basis of difference	Convertible paper money	Inconvertible paper money
1. Definition	It can be defined as the currency notes which are converted into standard money on demand by the issuing authority.	It can be defined as the money which is not convertible into standard money on demand.
2. Backed by	It is backed by metallic reserves and government securities.	It is not entirely backed by metallic reserves.