Question:

Read the following statements carefully:
Statement 1: Money is a commodity which is generally accepted as a medium of exchange.
Statement 2: Money solved the problem of double coincidence of wants.
In the light of the given statements, choose the correct alternative from the following:

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Money eliminates the need for double coincidence of wants by acting as a universal medium of exchange in economic systems.

Updated On: Jan 13, 2026

Statement 1 is true and Statement 2 is false.
Statement 1 is false and Statement 2 is true.
Both statements 1 and 2 are true.
Both statements 1 and 2 are false.

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The Correct Option is C

Solution and Explanation

Statement 1: Money is universally accepted as a medium of exchange, which makes it a key feature in economic transactions.
Statement 2: Money overcomes the limitation of barter systems, including the problem of double coincidence of wants, by allowing indirect exchanges.

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Top Questions on Money and Inflation

Match List-I with List-II:

List-I		List-II
A	Money supply is exogenously given.	I	Post-Keynesian school
B	Money supply is demand driven and credit led.	II	Say’s law
C	Rational expectation.	III	Monetarism
D	Supply creates its own demand	IV	Neo-classical school