Question

1. Explain why a market structure in which money is used as a medium of exchange is more conducive to the expansion of trade and exchange than a barter system. (3Mark)
2. What is money? Explain the three functions that money performs. (3 mark)
3. What is the relationship between money and inflation? Explain (3 mark)

Answer 1

Answer:

Money as a Medium of Exchange. Money helps to facilitate trade. Money is a medium exchange because buyers and sellers agree to its common value. Money can lose its value during periods of hyperinflation, when too much money is dumped into an economy.

Explanation:

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