ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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.

Detailed explanation-2: -Currency and money are mediums of exchange. They are necessary for an economy for efficient trading and boosting the activities related to trade and exchange. Significantly, they have purchasing power, stored value, and common terminology and act as a standard unit measurement.

Detailed explanation-3: -A medium of exchange is a portable instrument that is used as an intermediary to facilitate the sale and purchase of goods between parties. In modern economies, the medium of exchange is currency. A currency must remain reasonably stable in value in order for it to work as an intermediary.

Detailed explanation-4: -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.