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Questions
How does money resolve the problem of double coincidence of wants?
Explain the medium of exchange function of money.
Answer in Brief
Solution
- Money serves as a bridge in the exchange of commodities and services.
- Money can be used to buy and sell any commodity.
- Money is accepted by everyone in exchange for goods and services.
- Sellers can easily offer their products for money. Similarly, customers can purchase products with money.
- Using money reduces the issue of competing needs.
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Inconveniences Or Difficulties of Barter System
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RELATED QUESTIONS
Read the following dialogue between two people:
| Sita: | I want 1 kg of potatoes. |
| Rani: | What will you give in exchange? |
| Sita: | I can give you 2 litres of milk in return for the potatoes. |
| Rani: | I don't need milk, I want a pair of shoe. |
Which of the following problem is being faced by Sita and Rani in their exchange process?
Which of the following is not a problem of barter system of exchange?
State two difficulties of barter system.
Enumerate any two difficulties faced under the barter system of exchange.
Explain how money can overcome the difficulties of double coincidence of wants.
What is meant by double coincidence of wants?
