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Class 10 › Economics › Money and Credit
CBSE2026Class Class 10 · Economics1 Marks · Mcq✅ Verified
Why is Rupee accepted as a medium of exchange in India?
A. Because it is issued by the Reserve Bank of India on behalf of the State Government.
B. Because it is issued by the Reserve Bank of India on behalf of the Central Government.
C. Because it is issued by the State Bank of India on behalf of the Central Government.
D. Because it is issued by the Reserve Bank of India on behalf of the World Bank.
✅ Answer & Solution
✅ Correct Answer: B
Step 1: Modern currency is accepted as a medium of exchange because it is authorised by the government of the country. Step 2: In India, the Reserve Bank of India issues currency notes on behalf of the Central Government. Step 3: The law legalises the use of the rupee as a medium of payment that cannot be refused in settling transactions in India - no individual in India can legally refuse a payment made in rupees. Step 4: Hence the correct answer is Option (B).
