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प्रश्न
How does money solve the problem of double coincidence of wants? Explain with an example of your own.
How does money solve the problem of double coincidence of wants?
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उत्तर
Money solves the problem of double coincidence of wants by acting as a medium of exchange. Double coincidence of wants implies a situation where two parties agree to sell and buy each other’s commodities, i.e., what one party desires to sell is exactly what the other party wishes to buy. Money does away with this tedious and complex situation by acting as a medium of exchange that can be used for all commodities. For example, if an ice-cream vendor wants a bicycle but the bicycle manufacturer wants clothes, and not ice-creams, then the vendor can use the money to obtain a bicycle. He does need to adhere to the bicycle man’s needs because money acts as the common medium of exchange. Similarly, the bicycle manufacturer can then use the money to buy clothes.
Notes
Students should refer to the answer according to their question.
संबंधित प्रश्न
Why is modern currency accepted as a medium of exchange without any use of its own? Find out the reason.
How do money and muscle power play an important role in elections? Explain.
Which one of the following refers to investment?
(A) The money spent on religious ceremonies
(B) The money spent on social customs
(C) The money spent to buy assets such as land
(D) The money spent on household goods
How do the deposits with banks become their source of income?
How can money easily exchange it for goods or services? Give example to explain.
Why one cannot refuse a payment made in rupees in India?
Which one of the following is the appropriate meaning of collateral?
How is money used in everyday life? Explain with examples.
Analyse the role of credit for development.
Explain the meaning of 'Currency'.
