How does money eliminate the need for double coincidence of wants?
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Heyy!
Earlier, in the economy, barter system of exchange prevailed, ie., goods were exchanged for each other. For example: you sell rice and i sell shoes, under barter system i would sell you shoes in exchange of some amount of rice. However, this system couldn't be a success. This is because many a times the seller of one commodity would not want something that he/she is being offered in exchange of his/her goods. Eg:(according to my previous example) you do not want shoes in exchange of rice, you desire something else.
This proved to be difficult. However, since the introduction of money, a common thing(money) was exchanged in return of goods that a person desires. Ie., money acts as a common denominator in the market.
Hope this helped you ^_^
Earlier, in the economy, barter system of exchange prevailed, ie., goods were exchanged for each other. For example: you sell rice and i sell shoes, under barter system i would sell you shoes in exchange of some amount of rice. However, this system couldn't be a success. This is because many a times the seller of one commodity would not want something that he/she is being offered in exchange of his/her goods. Eg:(according to my previous example) you do not want shoes in exchange of rice, you desire something else.
This proved to be difficult. However, since the introduction of money, a common thing(money) was exchanged in return of goods that a person desires. Ie., money acts as a common denominator in the market.
Hope this helped you ^_^
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