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 is the most common medium of exchange accepted as a standard by all parties for settling economic transactions.

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: -Conventional Approach: It takes into consideration only two functions of money, namely, medium of exchange and measure of value.