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mediumMCQGeneral Awareness Practice Set2026Economics
1 mark

When demonetisation occurs, the currency loses its __________ and is no longer of the status to be used as legal money for any kind of transaction.

  1. A
    Currency value
  2. B
    Face value
  3. C
    Money value
  4. D
    Coin value

Solution & Step-by-step Explanation

During demonetisation, a specific currency unit is stripped of its status as legal tender. While it technically loses its status as "legal tender," in the context of valuation, it loses its Face Value as money. This means the value printed on the note is no longer guaranteed by the government for transactions.

Practice this question

Try it yourself before checking the explanation above.

When demonetisation occurs, the currency loses its __________ and is no longer of the status to be used as legal money for any kind of transaction.
A
Currency value
B
Face value
C
Money value
D
Coin value

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demonetisationlegal_tendercurrencyeconomy

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