Paper money issued by the government is called

• A. Banknotes
• B. Cash
• C. Legal Tender
• D. Currency

Answer: (D)

Money issued by the government is the system of the country's money, which we call currency. Paper money is one form of that currency (the banknotes you hold), but currency covers all the money used in the economy, including coins as well. Banknotes are a specific physical form, so they’re narrower than currency. Legal tender describes the obligation to accept money for debts, not the name of the instrument itself. Cash refers to money in hand, which is part of currency but doesn’t name the overall system. So currency is the best term because it properly names the government-issued money used in everyday transactions, with paper money being one of its forms.