Money and credit

Question

'Modern currency is without any use of its own’; then why is it accepted as a medium of exchange?

Answer 1

Modern currency, like paper money or digital money, holds value because of trust and government backing. People believe it has value because everyone accepts it as a medium of exchange for goods and services. Governments regulate and guarantee its value, ensuring stability and acceptance. It's not about the physical money itself, but the trust in its purchasing power. This collective trust and legal endorsement make it a widely accepted medium of exchange.

Answer 2

The Modern Currency is without any use of its own:

1) The modern forms of money include currency - paper notes and coins.

2) Unlike the things that were used as money earlier, modern currency is not made of precious metal such as gold, silver and copper and unlike grain and cattle, they are neither of everyday use.

3) Money is yet accepted as a medium of exchange because it is authorized by the government of the country.