Question

Convertible paper money and Inconvertible paper money.

Answer 1

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.