why must old currency be taken out of circulation when new currency is made? the old currency is more valuable than the new currency. the new currency is much more liquid than the old currency. too much currency in an economic system will cause inflation. too much currency in an economic system will create artificial wealth.

Manufacturing and currency trading is a government monopoly.

Economic theory explains that the government needs to control its monetary base so that the economic environment is preserved. A ruler can not simply make more money and inject into the economy because it will cause inflation.

That is, the inflationary process is directly associated with the amount of money in circulation in the economy. By replacing the new velar currencies, the government is only doing a counterpart transaction, without affecting the monetary base, ie the amount of currency in circulation and held by the banks.

So the third alternative is correct.

dear friend:

  i hope this letter finds you in soaring spirits and vibrant health. as you had expressed the wish to know about culture, traditions, and unity of india in your previous letter, in the following lines i have tried my best to give you glimpses of our culture, traditions, and unity. you will be amazed to know that our culture is the oldest culture in the world and the birth place of hinduism, buddhism, jainism, and sikhism. you won’t find any other culture as varied and multi-colored, multi-lingual as ours. each region has its own unique culture, traditions, language. there are 22 official languages in india.

  basically, india is a spiritual country with orthodox traditions. for example the people of india believe in traditions set by their wise forefathers. arranged marriages, joint-family system, universal brotherhood, vegetarianism, celebrating festivals such as diwali, holi, eid, etc., are the salient features of our culture and traditions.

  another unique aspect about our country is ‘unity in diversity’. in spite of the multi-lingual, multi-religious, multi-traditional, multi-cultural society, people live peacefully together, respecting one another’s views, cultures, traditions, and differences. i am sure you would love to visit india soon, and have a first-hand experience of the multi-colored culture. give regards to uncle and aunt. do visit india with your family and experience our hospitality.

your friend,