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Economics · May / June 2016 · Paper 11 · Question 9

2281Money and banking

What is the usual reason why citizens trust their country's banknotes?

  1. AThey are acceptable for trade and exchange.
  2. BThey are backed by gold at the central bank.
  3. CThey are convertible into the US$ or Chinese Yuan.
  4. DThey are recognisable and in infinite supply.

As printed in the paper

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Correct answer: A. They are acceptable for trade and exchange.

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