Question

How does money resolve the problem of double coincidence of wants? 

Explain the medium of exchange function of money.

Answer 1

1. Money serves as a bridge in the exchange of commodities and services.
2. Money can be used to buy and sell any commodity.
3. Money is accepted by everyone in exchange for goods and services.
4. Sellers can easily offer their products for money. Similarly, customers can purchase products with money.
5. Using money reduces the issue of competing needs.