Maharashtra State BoardHSC Arts 12th Board Exam
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Convertible Paper Money and Inconvertible Paper Money. - Economics

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Convertible paper money and Inconvertible paper money.

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Solution

Points Convertible Paper Money Inconvertible Paper Money
1. Meaning It is that money which can be converted into standard money on demand. It is also known a fiat money, this money is sanctioned on the command of Government.
2. Backed by Reserves This money is normally backed by gold or silver reserves. Therefore, it can be converted into gold or silver. This money is not backed by gold or silver reserves. Therefore, it cannot be converted into gold or silver.
3. Current Usage Nowadays, convertible paper money is not in use. Nowadays, inconvertible paper money is in use in almost all countries.
Concept: Type of Money
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