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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?
Write answer in 'one' or 'two' paragraph .
Explain the primary functions of money.
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?
Explain primary, secondary and contingent functions of money.
Fill in the blank with appropriate alternatives given below
Medium of exchange is __________ function of money.
______ is the primary function of money.
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 |
Which of the following are the functions 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.
Which function of money helps avoid the problem of finding someone who wants exactly what you offer in exchange?
Which function of money makes it possible to save now and spend later for future needs?
Paying rent each month is an example of which primary function of money?
Why is money called the most liquid asset?
