Single Answer MCQ
Q-00045427
Why can modern currency act as a medium of exchange?
1
It is made of precious metals
2
It is accepted by the government
3
It has intrinsic value
4
It is universally recognized
Answer and Solution
Answer
B. It is accepted by the government
Solution:
Modern currency acts as a medium of exchange because it is authorized and backed by the government, which guarantees its acceptance in all transactions.
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