how does money solve the problem of double coincidence of wants? Explain with an example of your own.
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Explanation:
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., Example:- what one party desires to sell is exactly what the other party wishes to buy.
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Explanation:
barter system only works when both the parties are ready to xchange their goods i.e person A should have the good that person B wants. but usually this type of coincidence is very rare.
money eliminates this problem. today, the buyer and seller xchange good for money, due to common measure of value function of money. it facilitates. xchanges of goods and services and help in carrying on trae smoothly.
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