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Question
With reference to money, which one of the following statements is correct?
Options
All paper currency is inconvertible money.
Cheque is also a fiat money.
Money cannot transfer value from one person to another.
M2 = C + DD + OD
Solution
All paper currency is inconvertible money.
Explanation:
It suggests that money cannot be converted into gold or other precious metals. It is not the responsibility of the issuing government to transform paper notes into gold coins.
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