Question

Q. Consider the following statements:

Which of the statements given above is/are incorrect?

• A.
  1 only
• B.
  2 and 3 only
• C.
  1 and 3 only
• D.
  1, 2 and 3

Answer 1

The correct option is C

1 and 3 only

Explanation:

Statement 1 is incorrect: Demand deposits are not legal tenders as Cheques drawn on savings or current accounts can be refused by anyone as a mode of payment.

Statement 2 is correct and 3 is incorrect: Currency notes and coins are called fiat money as RBI promises the vale of currency and coins. Without this guarantee, neither currency, cheques nor coins have any intrinsic value, unlike gold and silver. They are legal tenders and cannot be refused by anyone.