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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
What are the main functions of money?
Answer the following question
What are the contingent functions of money?
______ is the primary function of money.
Which of the following are the functions of money?
Identify the correctly matched pair of items in Column A to that of Column B.
| Column A | Column B | ||
| 1. | supply of money | a | Money in circulation at a point |
| 2. | Stock of Money | b | Supply of money considered over a period |
| 3. | Flow of Money | c | Money held by Public and the Bank today |
| 4. | Reserve Money | d | Supply of money studied at a point of time |
“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.
What does money provide when individuals compare prices to determine the worth of goods?
Which major problem of the barter system is solved directly by using money?
Which function of money is used when a person sells vegetables for cash and then buys clothes?
Why is money called the most liquid asset?
Banks use public deposits of money to create loans. Here money is mainly acting as ______.
Medium of Exchange promotes efficiency in exchange and production, specialisation and which other feature?
Which function of money is also called Unit of Account?
Store of Value is also called which function of money?
For Maximisation of Profit / Employment of Factors, money helps producers decide what?
Comparing prices of two brands of chips is an everyday example of which function?
Which set consists of the Secondary functions of money?
