A bank note is said to be a legal tender because it is

Assessment: WAEC SSCE - Economics - 2016 (Objective) Subject: Economics

Question 1 Report

A bank note is said to be a legal tender because it is

Answer Details
A banknote is said to be a legal tender because it is backed by law. This means that it is accepted by law as a means of payment for goods and services. Legal tender is a form of payment that must be accepted by law for the settlement of debts, taxes, and other financial obligations. Therefore, a banknote can be used as a means of exchange in the economy because it is backed by the law, and it carries the full faith and credit of the government. The legal tender status of a banknote also ensures its acceptability and its value as a medium of exchange in the economy.
Read lesson note on Banking (JAMB)
Read lesson note on Theory Of Costs (JAMB)
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