how does the use of money make it easier to exchange the things?? give an example..
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Answer:It is easy to exchange things with the use of money because money acts as a 'standard mode of payment' involving transactions. For example – Suppose a shoe manufacturer wishes to sell his shoes and buy wheat. He would sell his shoes in the market for money and then use the money to buy wheat.
Money as a Medium of Exchange. Money is a medium exchange because buyers and sellers agree to its common value. Money can lose its value during periods of hyperinflation, when too much money is dumped into an economy.
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The use of money makes it easier to exchange things because-
- it is accepted as medium of exchange
- it serves as a unit of value
- it solves the problem of double coincidence of wants.
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