RRaahUPSC
2018 · EconomyPrevious Year Question
Q46.
Which one of the following statements correctly describes the meaning of legal tender money?
A. The money which is tendered in courts of law to defray the fee of legal cases
B. The money which a creditor is under compulsion to accept in settlement of his claims
C. The bank money in the form of cheques, drafts, bills of exchange etc.
D. The metallic money in circulation in a country
Answer

B

Explanation

Legal tender is any official medium of payment recognized by law that can be used to extinguish a public or private debt. A creditor is obligated to accept legal tender toward repayment of a debt. Legal tender can only be issued by the national body that is authorized to do so.
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