Question

explain the significance of money what are the purpose for demand for money​

Answer 1

Answer- 1-  Money has Facilitated Exchange and Promoted Trade

               2- Money Promote Division of Labour and Productivity

                3- Money Promotes Saving

                4- Money helps in Maximizing Satisfaction or Profits by   Consumers and Producers

                 5-  Money can help in Reviving the Economy from Recession or Depression

Explanation: Money is a medium of exchange; it allows people to obtain what they need to live. Bartering was one way that people exchanged goods for other goods before money was created. Like gold and other precious metals, money has worth because for most people it represents something valuable.

Answer 2

Significance if money lies in serving its three functions.

Money has various purposes for demand which also explains its significance. These include -

• It serves as a medium of exchange

• It stores value and acts as an account unit.

• It facilitates division of labour and also the productivity.

• It promotes the savings of people.

• It helps in the satisfaction of customers and producers by selling and purchasing of goods.

• Money demand represents the rates and revenues. If income rises, then there will be more demand for money, thus enabling consumers to purchase more goods.

• The demand for holding money depends on the frequency of getting paid, and the cost of bank deposits.