Banking 5 - Introduction to Bank Notes Flashcards
1
Q
what is a bank note?
A
currency issued by the federal reserve / central bank
e.g., dollar bill, 5 pound note
2
Q
what are bank notes backed by?
what gives bank notes value?
A
they are fiat currency
this means they have value because the government proclaim them to be legal tender
3
Q
legal tender?
A
coins or banknotes that must be accepted if offered in payment of a debt
4
Q
why are bank notes from different banks all the same?
A
because every bank issues bank notes from a singular central bank
e.g., in the US, federal reserve central bank issue bank notes
