MONEY AND INFLATION — Economics STD 12 Commerce — Question
Gujarat BoardEnglish MediumSTD 12 CommerceEconomicsMONEY AND INFLATION2 Marks
Question
Discuss the function of money as a medium of exchange.
✓
Answer
Money as a medium of exchange:
The most important function of money is to act as a medium of exchange and trade.
Money overcomes the limitation of the lack of ‘double coincidence of wants’ and makes exchanges easier. For example, a farmer can get money in exchange of wheat and then from that money he can buy
clothes, shoes, oil, etc.
An individual can spend money to satisfy his present demands of goods and supplies. He can also save the money to satisfy his future needs for goods and supplies.
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