Question

Why are currency notes described as inconvertible paper money?

Options

• They cannot be exchanged for other notes.

• They cannot be converted into gold or silver by the holder.

• They cannot be used for foreign trade.

• They cannot be deposited in banks.

Answer 1

They cannot be converted into gold or silver by the holder.

Explanation:

Inconvertible paper money means the note cannot be exchanged for a fixed quantity of gold or silver; it is only exchanged for other money.