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Home› UPSC CSE› Prelims GS Paper I› 2018 questions› Question 97

UPSC CSE Prelims

Subject: Economy Chapter: Monetary Policy

2018 PYQ

Question 97

Which one of the following statements correctly describes the meaning of legal tender money ?

Choose one answer AThe money which is tendered in courts of law to defray the fee of legal cases BThe money which a creditor is under compulsion to accept in settlement of his claims CThe bank money in the form of cheques, drafts, bills of exchange, etc. DThe metallic money in circulation in a country

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Correct answer: B

Correct Option: B Explanation: Legal tender is money that the law recognises as valid settlement of a debt, which a creditor must accept when properly tendered within applicable limits. Option-wise Analysis: A: Incorrect - Court-fee payment does not define legal tender. B: Correct - Correct-it refers to money legally acceptable in discharge of a debt. C: Incorrect - Cheques and drafts are payment instruments, not automatically legal tender money. D: Incorrect - Legal tender can include banknotes and coins; it is not restricted to metallic currency.

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