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Unit 4 Ch 3 : Money and Credit — Social Studies STD 10 — Question

CBSE BoardEnglish MediumSTD 10Social StudiesUnit 4 Ch 3 : Money and Credit3 Marks
Question
How is money used as a medium of exchange? Explain with examples.
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Answer

Money as a medium of exchange
  1. A person holding money can easily exchange it for any commodity or service that he or she wants.
  2. Every one prefers to receive payments in money.
  3. Money acts as an intermediate in the exchange process.
  4. Money eliminates the need for double coincidence of wants. For example, a farmer can sell his crops to anyone who wants to purchase it and earn money. With the earned money he can purchase anything.

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