Question

How is money used as a medium of exchange? Explain with examples.(Delhi - 2013)

Answer 1

Answer:

Money is used as a medium of exchange since it is authoritised by the RBI. It acts as an intermediate in the exchange process.

Explanation:

1. It can be used to make purchases in the market.

2. Use of money has made it easier to exchange services such as the service of a doctor.

3. The transactions are made in money as a person holding money can easily exchange it for any commodity or services.