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Questions
Explain various stages in the evolution of money.
Mention different stages in the evolution of money.
Solution
Stages in the Evolution of Money:
- The first stage in the evolution of money is commodity money. In the olden days, commodities (such as shells, bows, arrows, stones etc.) were used as medium of exchange.
- In the second stage metallic money was used as full bodied money.
- From 19th century onward, next important stage in the evolution of money is the paper money.
- In modern times, demand deposits at banks (called bank money) are used as money.
- Plastic money in the form of debit cards, credit cards are becoming more popular these days.
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