Justify the following statements with valid arguments:
Money serves as the ‘medium of exchange’ for transactional purposes in an economy.
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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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- \[ \begin{array}{|c|l|r|} \hline \textbf{S.No.} & \textbf{Items} & \textbf{Amount (in ₹ Crore)} \\ \hline (i) & \text{Tax Receipts} & 1,200 \\ \hline (ii) & \text{Revenue Expenditure} & 3,700 \\ \hline (iii) & \text{Non-Tax Receipts} & 2,000 \\ \hline (iv) & \text{Recovery of Loans} & 145 \\ \hline (v) & \text{Capital Expenditure} & 500 \\ \hline (vi) & \text{Disinvestment} & 120 \\ \hline (vii) & \text{Interest Payments} & 1,070 \\ \hline \end{array} \]
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