Legal tender is the national currency, such as paper money and coins, that is declared by law to be valid payment for debts and financial obligations.
What is legal tender money in economics?
Legal tender is something which is acknowledged by the laws as a mechanism to settle a private or public debt or in order to meet a fiscal responsibility which includes paying taxes, abiding by contracts, and finally damages or fines. Almost every country uses its national currency as legal tender.
What is the legal tender law?
5103, entitled “Legal tender,” states: “United States coins and currency [including Federal Reserve notes and circulating notes of Federal Reserve Banks and national banks] are legal tender for all debts, public charges, taxes, and dues.” This statute means that all U.S. money as identified above is a valid and legal …
Why is money called legal tender money?
History tells us that ancient humans used salt and spices as currency. But ‘Legal tender’ is the money that is recognised by the law of the land, as valid for payment of debt. It must be accepted for discharge of debt. Currency notes are unlimited legal tender and can be offered as payment for dues of any size.
What is not an optional money?
(ii) Non-Legal Tender Money or Optional Money: It refers to that form of money, which is generally accepted, but legally, one is not bound to accept it. For example, cheques, bank drafts, bills of exchange, etc. do not have legal backing and their acceptance is totally optional.
What is non-legal tender money?
Non-Legal Tender-Money: It is a form of money, which is generally accepted, but legally is not bound to accept it. Such as cheques, bank drafts, bills of exchange, postal orders etc. are not legal tenders and are accepted only at the option of the creditor, lender, or seller.
What is another term for legal tender money?
Adopting the U.S. dollar as the primary legal tender is colloquially known as “dollarization,” although the practice generally is called currency substitution.
What is another word for legal tender?
In this page you can discover 11 synonyms, antonyms, idiomatic expressions, and related words for legal tender, like: circulating medium, cold cash, currency, hard cash, medium-of-exchange, money, valid currency, sound currency, honest money, tender and stamp.
