Flashcard: Understanding Money and Digital Payments — 21 carte

UPSC Prelims economy myths

Common misconceptions about focus areas in questions.

PYQ analysis

Studying past questions to identify recurring themes.

Diversity in economy topics

Economy questions now cover more varied subtopics.

Barter system disadvantages

Requires double coincidence of wants and has high costs.

Money functions

Medium of exchange, unit of account, store of value.

Evolution of money

From barter to commodity money to digital forms.

Fungibility

Interchangeability of money units; NFTs are non-fungible.

Barter’s main flaw

No common medium, needs perfect wants match.

Types of money

Fiat money, digital coins, legal tender notes and coins.

Legal tender criteria

Must be fiat money issued by authority, legally accepted.

₹2000 note status

Not demonetized or withdrawn; still legal tender.

CBDC (e₹)

Digital currency issued by RBI, uses blockchain/ledger tech.

UPI ecosystem

Supports interoperable payments via QR codes and apps.

QR code interoperability

Use UPI or BharatQR; RBI banned new proprietary QR codes.

Merchant Discount Rate

Fee on transactions, capped by RBI, affected by subsidies.

UPI MDR subsidy

Government support reducing MDR to 0% for UPI/RuPay debit.

NPCI initiatives

BBPS for bills, UPMS for unified payment management.

Cryptocurrency basics

Digital money using cryptography, decentralized networks.

Blockchain technology

Shared ledger ensuring secure, transparent records.

NFT definition

Unique digital asset stored on blockchain, not interchangeable.

NFT challenges

Speculative bubbles, misuse for crime, high energy use.