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write a short note on money as a medium of exchange
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write a short note on money as a medium of exchange Related: Introduc...
Money as a medium of exchange
Money is a particular type of asset in an economy that people use to buy goods and services from other people or businesses. A medium of exchange is something that buyers will exchange with a seller when they want to purchase goods or services from the seller. While many things could be used as a medium of exchange in an economy, money is the most common and useful medium of exchange in our society.
Let's take a look at some examples to illustrate the concept and function of money as a medium of exchange. Imagine that you operate a small farm off the grid on the outskirts of a small town. You grow wheat and vegetables, and you have a couple of dairy cows and some pigs. You need some farming equipment, so you head into town to the local farm implement store where you offer to exchange several bushels of wheat for the equipment you need.
The owner of the store looks at you, and then politely tells you 'no.' He does offer to sell you the equipment for the amount of money listed on the price tags. Since you've been living off the grid, you don't have any money. You explain this to the store owner, and again, offer to trade your goods for his. He just shakes his head and says he has no use for your crops. In this example, you should see that money's power lies in the fact that people will almost always accept money in payment for a good or service. While our farmer may find someone who wants his crops, the potential buyer may not have what he needs, and the trade will not make sense.
Money solves the problem of double coincidence of wants.
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write a short note on money as a medium of exchange Related: Introduction to Money - Money and Credit, Class 10 SST
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write a short note on money as a medium of exchange Related: Introduction to Money - Money and Credit, Class 10 SST for Class 10 2024 is part of Class 10 preparation. The Question and answers have been prepared according to the Class 10 exam syllabus. Information about write a short note on money as a medium of exchange Related: Introduction to Money - Money and Credit, Class 10 SST covers all topics & solutions for Class 10 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for write a short note on money as a medium of exchange Related: Introduction to Money - Money and Credit, Class 10 SST.
write a short note on money as a medium of exchange Related: Introduction to Money - Money and Credit, Class 10 SST for Class 10 2024 is part of Class 10 preparation. The Question and answers have been prepared according to the Class 10 exam syllabus. Information about write a short note on money as a medium of exchange Related: Introduction to Money - Money and Credit, Class 10 SST covers all topics & solutions for Class 10 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for write a short note on money as a medium of exchange Related: Introduction to Money - Money and Credit, Class 10 SST.
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