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प्रश्न
Explain the significance of 'medium of exchange' function of money
Explain the medium of exchange function of money.
Explain the significance of 'medium of exchange' function of money.
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उत्तर
Medium of exchange:The primary function of money is to act as a medium of exchange between two parties involved in a transaction. It avoids the practical problems of wastage of time and resources involved in the barter system of exchange and it improves the efficiency of the transaction. It promotes allocation efficiency in the trade and production of goods and services. For the barter system, the sale and purchase of goods occurs at the same time. Their sale and purchase value also remains equal at that point. A person can purchase or sell goods with cash without selling or purchasing any good at that point, after money came into existence. Thus, the act of purchase and sale has been separated. Thereby the medium of exchange facilitated sale and purchase very easily in terms of monetary value.
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संबंधित प्रश्न
Explain the ‘unit of accounts’ function of money. How has it solved the related problem created by barter?
Explain the 'medium of exchange' function of money. How has it solved the related problem created by barter?
What is a barter system? What are its drawbacks?
What are the main functions of money? How does money overcome the shortcomings of a barter system?
Answer the following question
What are the contingent functions of money?
______ is the primary function of money.
Money is a medium of ______.
Money is something that is ______.
Money on wings indicates ______.
Medium of exchange and measure of value is ______.
From the following data, calculate "Net Value Added at Factor Cost".
| S.no. | Content | (Rs. in Lakhs) |
| (i) | Sales | 400 |
| (ii) | Change in Stock | (−) 20 |
| (iii) | Intermediate consumption | 200 |
| (iv) | Net indirect taxes | 40 |
| (v) | Exports | 50 |
| (vi) | Depreciation | 70 |
“The value of all goods and services can be expressed in monetary units.”
On the basis of the given statement, identify the function performed by money:
‘Money is an asset which can be stored for use in future.
In the light of given statement, identify the function of money.
“Money helps to express the monetary value of goods and services in the market”.
On the basis of the given statement, Identify the function performed by money.
"Does a shirt priced at Rs. 300 exemplify the store of value function of money? Select the appropriate option:
Paying rent each month is an example of which primary function of money?
