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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 'medium of exchange' function of money. How has it solved the related problem created by barter?
Explain primary, secondary and contingent functions of money.
______ is the primary function of money.
Money on wings indicates ______.
Medium of exchange and measure of value is ______.
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 is an asset which can be stored for use in future.
In the light of given statement, identify the function of money.
Which function of money helps avoid the problem of finding someone who wants exactly what you offer in exchange?
What does money provide when individuals compare prices to determine the worth of goods?
Which function of money is used when a person sells vegetables for cash and then buys clothes?
When all goods have their prices written in rupees, money is acting as ______.
Banks use public deposits of money to create loans. Here money is mainly acting as ______.
Who is known for classifying the functions of money into primary, secondary, and contingent functions?
A trouser costs ₹1000 and a shirt costs ₹500. What exchange ratio is made easy by Measure of Value?
Store of Value means a store of wealth or what for future use?
Which function helps transfer value from one person to another and from one place to another?
In modern economies, what plays a key role?
