Question

how does money solve the problem of double coincidence of wants ? explain with an example of your own ? (answer in short)
n.c.e.r.t class 10 chapter 3 money and credit ​

Answer 1

Explanation:

Answer: Money solves the problem of double coincidence of wants by acting as a medium of exchange. Double coincidence of wants implies a situation where two parties agree to sell and buy each other's commodities., i.e., what one party desires to sell is exactly what the other party wishes to buy.

Answer 2

Double coincidence of wants:

"In a barter system, commodities are exchanged with commodities without the use of money where both parties have to agree to sell and buy each other’s commodities. This is called the double coincidence of wants."

Money solves the problem of double coincidence of wants:

• It acts as a medium of exchange.
• A person having money can exchange it for any type of commodity.
• Example: If a shop-keeper wants a cycle and a cycle manufacturer wants jewelry but not anything from the shop, the shop-keeper can use the money to buy a cycle and the cycle manufacturer can use the money to buy jewelry.