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How does money overcome the shortcomings of a barter system? -

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Question

How does money overcome the shortcomings of a barter system?

Options

  • Money solves the problem of double coincidence of wants.

  • In barter system, it was very difficult to measure the value of one good in terms of another

  • It was very difficult to store goods, especially perishable goods

  • All of the above

MCQ

Solution

All of the above

Explanation:

The lack of double coincidence is solved by using money as a medium of exchange. The absence of a common measure is solved by using money as a measure of value. Money as a valued stone solves the problem of wealth stoning. Money as a deferred payment standard eliminates the difficulties of borrowing and lending.

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Evolution of Money
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