What is the rationale behind why one is ready to hold a ten rupee coin?

The correct answer is its value is backed by the issuing authority. Key Points

• The issuing authority, which is the government in this case, guarantees the value of the coin.
• This means that the coin can be used as a medium of exchange, as people trust that it is worth the value printed on it.
• The ten rupee coin is not finely or artistically minted, nor does it have an intrinsic value greater than Rs. 10.
• Its value is purely symbolic and based on the trust that people have in the issuing authority.

Additional Information

• The term "issuing authority" refers to the entity that is responsible for creating and distributing currency.
• In India, this is the Reserve Bank of India (RBI), which is the central bank of the country.
• Finely and artistically minted coins may have aesthetic value, but this does not necessarily make them more valuable as currency.
• The value of a coin is determined by its purchasing power, which is based on the trust that people have in the currency and the stability of the economy.
• The intrinsic value of a coin is the value of the metal or materials used to make it.
• For example, a gold coin may have an intrinsic value based on the current market price of gold.
• However, most modern currency is not based on intrinsic value, but on the trust and confidence that people have in the issuing authority.