Answer: The use of money makes it easier to exchnage things because it is accepted as a medium of exchange it serves as a unit of value . it solves the problem of double councidence of wants.
How does the use of money?
Money has three primary functions. It is a medium of exchange, a unit of account , and a store of value: Medium of Exchange: When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange.
How does the use of money make exchange of things easier explain with example class 10?
Answer: The use of money makes it easier to exchange things because • it is accepted as a medium of exchange . it serves as a unit of value. it solves the problem of double coincidence of wants.
How is money beneficial in transaction?
1} A person having money can easily exchange it with any other commodity . ... 2}Money acts as a medium of exchange. 3}Money eliminates barter system.
How does money help to make exchanges easier?
Answer: The use of money makes it easier to exchange things because • it is accepted as a medium of exchange . it serves as a unit of value. it solves the problem of double coincidence of wants.
How does money solve the problem of double coincidence of wants?
How does money solve the problem of double coincidence of wants ? ... A person holding money can easily exchange it for any commodity or service that he or she might want . For example: It is no longer necessary for the shoemaker to look for a farmer who will buy this shoes and at the same time sell him rice.
How does the use of money make it easier give an example?
Answer : It is easy to exchange things with the use of money because money acts as a ‘standard mode of payment’ involving transactions. For example – Suppose a shoe manufacturer wishes to sell his shoes and buy wheat. He would sell his shoes in the market for money and then use the money to buy wheat.
Why the demand deposit are considered as money?
Why are demand deposits considered as money? Answer: Demand deposits are considered as money, because they can be withdrawn when required and the money withdrawn can be used for making payments . So, they are also considered as money in the modern economy.
How does money act as a medium of exchange?
First, money serves as a medium of exchange, which means that money acts as an intermediary between the buyer and the seller . ... To serve as a medium of exchange, money must be very widely accepted as a method of payment in the markets for goods, labor, and financial capital. Second, money must serve as a store of value.
Is barter a system?
A barter system is known as an old method of exchange . This system has been practised for centuries and long before money was introduced. People started exchanging services and goods for other services and goods in return. ... The value of bartering items is negotiable with the other party.
What are the advantages of cashless transaction?
- ADVANTAGES OF GOING CASHLESS.
- Convenience. The ease of conducting financial transactions is probably the biggest motivator to go digital. ...
- Discounts. ...
- Tracking spends. ...
- Budget discipline. ...
- Lower risk. ...
- Small gains. ...
- GO DIGITAL, GET DISCOUNTS.
What is credit and why it is important class 10?
Answer: Credit means loans. It refers to an agreement in which the lender supplies the borrower with money, goods or services in return for the promise of future repayment. Cheap and affordable credit is crucial for the country’s growth and economic development .
How has money solve the problem of barter?
Money solves the problems that the barter system creates. ... The accountant then uses this money to buy shoes . To serve as a medium of exchange, people must widely accept money as a method of payment in the markets for goods, labor, and financial capital. Second, money must serve as a store of value.
What is the problem of double coincidence of wants?
Double coincidence of wants means that both of the parties have to agree to sell and buy each commodity . Under this system, problems arise through the improbability of the wants, needs, or events that cause or motivate a transaction occurring at the same time and the same place.
What is double coincidence of wants give example?
Double coincidence of wants occurs when two individuals swap their goods, in exchange for one another. This is also referred to as the ‘perfect barter exchange’. ... For example, if two individuals want to exchange and place on a loaf of bread and a bag of apples , then this is known as double coincidence of wants.
