ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The answer to this question relates to the important economic concept of liquidity, which is the relative ease and speed with which an asset can be turned into a medium of exchange. Money is the most liquid asset of all because it is the medium of exchange.

Detailed explanation-2: -Answer and Explanation: Money is different from other assets in an economy in two ways: it is a medium of exchange and a store of value. This means that money is the ultimate fungible good and you one unit of it isn’t at all different than another.

Detailed explanation-3: -To summarize, money has taken many forms through the ages, but money consistently has three functions: store of value, unit of account, and medium of exchange.

Detailed explanation-4: -Money is different from other assets in the economy because it is the most liquid asset available. Other assets vary widely in their liquidity.

Detailed explanation-5: -Money facilitates transactions of goods and services as a medium of exchange. Producers sell their goods to wholesalers in exchange of money. Wholesalers, in turn, sell their goods to the retailers and the retailers sell these goods to the consumers in exchange for money.