Why money called medium of exange
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It is because money eliminates the problem of double coincidence of wants
one can buy anything according to his own wish
one can buy anything according to his own wish
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long before goods are exchanged for goods. but that arises problem. suppose a person needs a cloth and he has wheat to exchange, but the cloth merchant don't need wheat, rather he needs something else. someone else may need wheat but have no clothes to exchange with. to avoid these types of problems, money is used as a medium of exchange.
the person can sell his wheat for money, that money he can use to buy clothes
the person can sell his wheat for money, that money he can use to buy clothes
AmitParidabbsr:
that means total elimination of double coincidence of wants
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