Question:
Justify the following statements with valid arguments:
Money serves as the ‘medium of exchange’ for transactional purposes in an economy.
Justify the following statements with valid arguments:
Money serves as the ‘medium of exchange’ for transactional purposes in an economy.
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Highlight the role of money in overcoming barter system limitations in such questions.
Updated On: Jan 29, 2025
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Solution and Explanation
Money acts as a universally accepted medium for exchanging goods and services.
- It eliminates the need for the double coincidence of wants, which is a major limitation of the barter system.
- This enhances trade efficiency and simplifies transactions.
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