ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Medium of Exchange: Right from the beginning, money has been performing the important function of medium of exchange in the society. Money facilitates transactions of goods and services as a medium of exchange. Producers sell their goods to wholesalers in exchange of money.

Detailed explanation-2: -Money’s most important function is as a medium of exchange to facilitate transactions. Without money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another.

Detailed explanation-3: -Money is a medium of exchange; it allows people and businesses to obtain what they need to live and thrive. Bartering was one way that people exchanged goods for other goods before money was created. Like gold and other precious metals, money has worth because for most people it represents something valuable.

Detailed explanation-4: -Most forms of money are categorised as mediums of exchange, including commodity money, representative money, cryptocurrency, and most commonly fiat money. Representative and fiat money most widely exist in digital form as well as physical tokens, for example coins and notes.

Detailed explanation-5: -Money acts as a medium of exchange. This allows goods and services to be traded without the need for a barter system. Barter systems rely on there being a double coincidence of wants between the two people involved in an exchange.