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Question

Distinguish between limited legal tender and unlimited legal tender.

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Solution

Limited Legal TenderUnlimited Legal Tender
The coins of smaller denominations are considered as limited legal tenders (say 1/2/5 rupee coins) because they are acceptable only for meeting financial transactions of lower value (say meeting your short distance bus/auto fare)The rupee notes of higher denominations (say 100/500/1000 rupee notes) are considered as unlimited legal tenders because they can be used settling claims relating to high value transactions.


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