HSC Commerce (Marketing and Salesmanship) 12th Board ExamMaharashtra State Board
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Convertible Paper Money and Inconvertible Paper Money. - HSC Commerce (Marketing and Salesmanship) 12th Board Exam - Economics

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Question

Convertible paper money and Inconvertible paper money.

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.
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APPEARS IN

 2014-2015 (March) (with solutions)
Question 3.1.5 | 2.00 marks

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Solution Convertible Paper Money and Inconvertible Paper Money. Concept: Type of Money.
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