how does money solve the problem of double cincidence of wants? explain with example
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Double Coincidence of Wants is an essential feature in a barter system, where goods are directly exchanged without the use of money. However, in an economy using money as a medium of exchange, eliminates this by providing the crucial intermediate step.
For example, it is not necessary for a shoemaker to look for a farmer who will buy shoes made by him and at the same time, sell rice to him. All he has to do is to find a buyer for his shoes, who will pay him money for them.
With this money he can purchase rice or any other commodity available in the market.
For example, it is not necessary for a shoemaker to look for a farmer who will buy shoes made by him and at the same time, sell rice to him. All he has to do is to find a buyer for his shoes, who will pay him money for them.
With this money he can purchase rice or any other commodity available in the market.
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