ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Money is a system of value that facilitates the exchange of goods in an economy. Using money allows buyers and sellers to pay less in transaction costs, compared to barter trading. The first types of money were commodities. Their physical properties made them desirable as a medium of exchange .

Detailed explanation-2: -Bartering is based on a simple concept: Two individuals negotiate to determine the relative value of their goods and services and offer them to one another in an even exchange.

Detailed explanation-3: -The exchange of goods in return for other goods or services is called Barter System.

Detailed explanation-4: -A buyer can buy goods through money, and the seller can sell goods for money. Thus, buyers and sellers of goods/ services can solve their purposes with the help of money by using it as a medium of exchange. Q. 2-“Money as a store of value helps to shift purchasing power from present to the future”.

Detailed explanation-5: -Cash is legal tender that can be used to exchange goods, debt, or services. The term “cash” can sometimes also include the value of assets that can be converted into cash immediately.