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GCE Economics 1989 Question 33

Question 33

Money and Inflation

A legal tender is any

  1. A.form of money
  2. B.means of exchange authorized by the state
  3. C.commodity generally acceptable as a medium of exchange
  4. D.total productivity of labour
  5. E.amount of goods and services that the wage can fetch.
Show the answer and explanation

Answer: B (means of exchange authorized by the state)

Explanation

Legal tender is money whose acceptance for debts is backed by law, such as the notes and coins issued by the central bank.