Question
How can money easily exchange it for goods or services? Give example to explain.
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Answer
Money acts easier to exchange for goods and services:
A person holding money can easily exchange it for any commodity or service that he or she might want.
Everyone prefers to receive payments in money and exchange the money for things they want.
Example: A shoemaker wants to sell shoes in the market and buy wheat. The shoemaker will first exchange shoes for money and then exchange the money for wheat. If the shoemaker had to directly exchange shoes for wheat without the use of money. He would have to look for a wheat growing farmer who not only wants to sell wheat but also wants to buy the shoe in exchange. Both the parties have to agree to sell and buy each other's commodities. This process is very difficult, time-consuming and unhealthy.
A person holding money can easily exchange it for any commodity or service that he or she might want.
Everyone prefers to receive payments in money and exchange the money for things they want.
Example: A shoemaker wants to sell shoes in the market and buy wheat. The shoemaker will first exchange shoes for money and then exchange the money for wheat. If the shoemaker had to directly exchange shoes for wheat without the use of money. He would have to look for a wheat growing farmer who not only wants to sell wheat but also wants to buy the shoe in exchange. Both the parties have to agree to sell and buy each other's commodities. This process is very difficult, time-consuming and unhealthy.
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