Currency notes and coins cannot be refused by any citizen of the country for settlement of any kind of transaction due to which they are called

Option 1: Fiat money -> Money that has value by government decree, not backed by physical commodity.

Option 2: Legal tenders -> Currency that cannot be refused for payment of debts by law.

Option 3: Broad money -> A measure of total money supply including cash and deposits.

Option 4: Narrow money -> A measure of money supply including only physical currency and demand deposits.

---

Hence, Option 2: Legal tenders -> Legal tender is the official currency issued by the government that must be accepted if offered in payment of a debt. By law, no one can refuse legal tender for settlement of any transaction within the country. Currency notes and coins are legal tenders because they have the backing of law, making them universally acceptable for all types of transactions. -> correct