Money acts as medium of exchange.

1.	Money acts as medium of exchange.
Answer» Money acts as a medium of exchange in the following ways : (i) Overcomes the problem of double co-incidence of wants. For example, if a person needs wheat in exchange of tea, then he/she must search for a person who is ready to trade wheat for tea. Money made the need for such searches redundant. (ii) Acts as a medium of deferred payment. (iii) Has a store value

Answer»

Money acts as a medium of exchange in the following ways :

(i) Overcomes the problem of double co-incidence of wants. For example, if a person needs wheat in exchange of tea, then he/she must search for a person who is ready to trade wheat for tea. Money made the need for such searches redundant.

(ii) Acts as a medium of deferred payment.

(iii) Has a store value

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Money acts as medium of exchange.

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