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प्रश्न
Describe how money has removed the defects of the barter system.
How does money solve the problem of lack of a common measure of value that existed under the barter system?
Explain the medium of exchange function of money
How does money solve the problem of double coincidence of wants?
उत्तर
- Money serves as a standard unit of measurement in terms of which the value of all goods and services is measured and expressed. Under barter exchange, there existed no such common measure of value. The use of money has facilitated exchange transactions at all places and at all times.
- Money acts as the intermediary for the exchange of goods and services. Any commodity can be purchased or sold through money. Money is acceptable to everyone in exchange for goods and services. Sellers can easily sell their goods for money. Similarly, buyers can buy goods with the help of money. In this way, the use of money has solved the problem of double coincidence of wants.
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संबंधित प्रश्न
The function of money which allows a person to pay for a commodity at a future date is called as ______.
State the two primary functions of money.
______ are termed as Legal Tender Money.
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | Currency Notes | A. | General acceptability |
| (ii) | Demand deposits | B. | Lack of double coincidence of wants |
| (iii) | Feature of money | C. | Legal tender |
| (iv) | Problem of barter exchange | D. | Bank money |
Which of these is the primary function of money?
‘Which function of money is most closely linked to saving?
How does money act as a measure of value?
How does money help in the distribution of national income?
Explain the transfer of value function of money.
Distinguish between limited legal tender and unlimited legal tender.
