How does money solve the problem of double coincidence of wants? Explain with example.
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Hey friend, Barter system involves direct exchange of goods without the use of money, double coincidence is an essential feature. Money, by serving as a medium of exchange removes the problem of double coincidence of wants and helps to solve other difficulties like lack of divisibility, etc,. For example, it is no longer necessary for a farmer to lok for a book publisher who will buy him cereals and at the same time sell his books. All he has to do is to find a buyer for his cereals. If he has exchanged cereals for money, then he could buy any goods or things which he needs. This is because money acts as a medium of exchange. Hope this answer will help you...
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