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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?
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 ______.
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 |
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 |
“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:
"Does a shirt priced at Rs. 300 exemplify the store of value function of money? Select the appropriate option:
Which function of money makes it possible to save now and spend later for future needs?
Why is money called the most liquid asset?
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 ______.
Why is money called the most liquid asset?
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?
