Money — Economics STD 11 Commerce / Arts — Question
Maharashtra BoardEnglish MediumSTD 11 Commerce / ArtsEconomicsMoney4 Marks
Question
There are no disadvantages to paper money.
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Answer
No, I do not agree with the statement. Although paper money has many advantages and it has economized the use of precious metals it suffers from the following disadvantages:
The government may over the issue when there is a deficit in the budget and this may lead to inflation.
It is less durable as compared to metallic money.
It can be circulated only in the domestic economy, it is not useful for international trade.
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