Question

What are the modern forms of money how does the use of money make it easier to exchange things

Answer 1

The use of money makes it easier to exchange things because
(i) it is accepted as a medium of exchange.
(ii) it serves as a unit of value.
(iii) it solves the problem of double coincidence of wants.

Answer 2

Answer:

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Explanation:

Money overcomes the inefficiencies of the Barter system. Suppose a farmer who grows wheat wanted potatoes from another farmer who grows potatoes. There won't be any issue as long as the wheat growing farmer wants potatoes and the potato growing farmer wants wheat. Both items can be exchanged by the barter system. The problem would arise if the wheat growing farmer needs potatoes but the potato growing farmer needs tomatoes from a different farmer. The Barter system would not be useful in this case. To overcome this difficulty, money is used where money can be paid directly to buy what is needed without waiting for 'double coincidence of wants' to arise.