In the Informal sector, loans from moneylenders, traders, employers, relatives and friends are included. In the formal sector, loans from banks and cooperatives are included. • The interest rate, collateral and some documents fulfill the requirements of the terms of credit.

However, in the financial markets, currencies are the units of account for national economies and the exchange rates are determined by market factors. Because business takes place across borders, people often need to buy foreign currency. There are two main ways for governments to handle this situation. In India, the Reserve Bank of India is the only legal authority that can issue currency notes and coins on behalf of the central government. The Rupee is India’s currency and nobody can refuse to accept a payment made in rupees in India.

The WorldAtlas.com indicates that there are 180 national currencies recognised by the United Nations currently in circulation. Further, 66 countries either peg their currencies directly to the U.S. dollar or use it directly. Most of the countries issue their currencies. Demand deposits also offer a facility which lends it the essential characteristics of money. Transactions are made in money because a person holding money can easily exchange it for any commodity or service that he desires. Traders said, strong dollar and negative sentiments across the global as well as domestic equity markets capped the gain in the rupee.

Terms of Credit

Currency is the main medium of exchange in the modern world that replaced the barter system long ago as a means of trading goods and services. By meeting loan requirements, banks mediate between those who have surplus funds called depositors and those who are in need of these funds called borrowers. The major portions of the deposits in banks are used to extend loans. A cheque is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name the cheque has been issued.

• Barter system involves goods being directly exchanged without the use of money and double coincidence of wants is an essential feature.
• The modern currency is without any use of its own.
• The currency deposit ratio shows the amount of currency that people hold as a proportion of aggregate deposits.
• Unlike the things that were used as money earlier, modern currency is not made of precious metals such as gold, silver, and copper.

Theory, EduRev gives you an ample number of questions to practice Which one of the following is a modern form of currency? Tests, examples and also practice Class 10 tests. Here you can find the meaning of What are the modern forms of money? Besides giving the explanation of What are the modern forms of money? Has been provided alongside types of What are the modern forms of money?

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Interest rate is specified when a lender provides loan to the borrowers. A borrower will have to repay the amount taken from the lenders with the amount of interest. In some case, lenders may demand collateral against loans. And at the end of the year he/she unable to repay the loan due to loss in production.

Here you can find the meaning of Which one of the following is a modern form of currency? A)Goldb)Silverc)Copperd)Paper notesCorrect answer is option ‚D‘. Defined & explained in the simplest way possible. Besides giving the explanation of Which one of the following is a modern form of currency? Has been provided alongside types of Which one of the following is a modern form of currency?

Now in the Modern days, we are using the money which were made up in the form of paper but not Gold, Silver and Copper. These are all been used in the ancient times but not used in the Modern days. They can come in many different forms such as cash cards, credit cards, debit cards, store cards, etc. As per Indian law, no other individual or organization is allowed to issue currency. In 2010, a new rupee sign (₹) was formally adopted replacing the sign ‚Rs‘ from the 8th of July 2011.

Lenders can use any method to get back their money from the borrowers. Sometimes, the incomes of the borrowers become less compare than the amount which has to pay due to the high rate of interest. As we know that major portion of the deposited money is provided to those people who are needy of money for economic activities. In India Reserve bank of India is supervised the functioning of loan activities in formal sectors. In India, the rate of interest in informal sector is greater than the rate of interest in formal sector.

People deposit their money in bank and get some rate of interest as extra income. Banks hold only some percentage of their deposit in bank. • An organisation constituted to collect the savings of the poor which is known as self-help group. Savings vary from member to member i.e Rs. 25 to Rs. 100 depending on the ability of the person to save. • Bank work as mediator between the depositors and the borrowers.

‘The Rupee is widely accepted as a medium of exchange’. IN the early times, people used to exchange one commodity for another, depending on their requirement under the barter system. However, exchanging goods in the barter system required double coincidence of wants.

Formal sector loans need to expand but it is also necessary that everyone receives these loans. The law also legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India. No other individual or organisation is allowed to issue currency as per Indian law.

Deposits with Banks

In bartering, goods and services were exchanged directly for other goods and services . Currency has replaced bartering as the primary means of exchanging goods and services in the modern world. The rupee is widely accepted as a medium of exchange’. Which one of the following is a modern form of currency? The modern forms of money are Metallic Money, Paper Money, and Credit Money.

As time progressed, with increases in trade a more convenient medium of exchange was needed to be introduced. Customers are authorised to withdraw their money anytime and banks are liable to pay them on demand, therefore these deposits are called demand deposits. Informal sector In the Informal sector, loans from moneylenders, traders, employers, relatives and friends are included.

At the moment, this group includes most of the world’s most important currencies, like the euro, British pound, and Japanese yen. Click here to get an answer to your question ️ Which one of the following is a modem form of currency. Iron, phosphorus, plastic, copper, zinc, cobalt, soil, water, aluminium, paper, nickel, silver, mercury. If a copper coil is placed into a solution of silver nitrate, silver crystal form on the surface of the copper. Which one of the following is a modern form of currency . If you want to know about which one of the following is a modern form of currency, continue reading and learn more.

• A facility of payment through cheque is also provided by the bank to their customers. Cheque work as an instrument for payment which is made by the paper. A person can directly transfer money to another person through cheque rather than in cash. • Introduction of money replaced the batter system.

What are the modern forms of money? Why is rupee widely accepted as a medium of exchange? Explain two reasons.

No person can refuse the Rupee for the transaction. If Rupee is refused by anyone, they can be sued by law. Therefore it is the law that makes the rupee as a widely accepted as a medium of exchange in the country. Financial institutions create electronic forms of money like credit and debit cards, online payment systems, and digital wallets. The other form in which people hold money is as deposits with banks. All the current types of money and their connections with the banking system are discussed vividly in Chapter 3 Money and Credit Class 10 Notes by Vedantu.

The main goal of a fixed exchange rate is to make people feel safe, especially if a country’s financial system isn’t as advanced as those of other countries. Investors gain confidence when they know exactly how much of the pegged currency they can get. President Nixon called off this deal with other countries because he was worried that the United States might run out of gold.

Rate of interest in formal sector is supervised by the legal authorities. • In the Informal sector, the rate of interest is supervised by moneylenders, traders, employers who are provided money. • As we know that major portion of the deposited money is provided to those people who are needy of money for economic activities. • The currency is authorized by the government of the country. So, it is used as a medium of exchange and accepted by the others.

Hence, the rupee is widely accepted as a medium of exchange. Modern forms of money include currency — paper notes and coins. The modern coins are not made with the precious metals like gold, silver. The real values of the modern coins are less than its face value. Currency notes are also used as a medium of exchange in modern economy.

We will delve into the concepts of money, its functions, and various forms. Additionally, we will examine the credit system, its importance, and the different sources of credit. By the end of this article, you will have a better understanding of how money and credit affect the economy and society as a whole. The other form of currency is based on market factors.

Money as a medium of exchange

The government sets the exchange rate between its currency and a major world currency, like the U.S. dollar or the euro. To keep the exchange rate stable, a country’s central bank either buys or sells the pegged currency. Money in the form of currency modern forms of currency has existed for at least 3000 years. Earlier, it used to exist in the form of coins. Modern money is usually useless on its own, and this is one thing that makes it modern. Currency serves as a means of exchanging commodities and services.