Meaning and Functions of Money

Answer

Barter system is a system of exchange where goods and services are directly exchanged for other goods and services without using money. For example, exchanging wheat for cloth. It is also called C-C e…

Answer

Double coincidence of wants means the simultaneous fulfillment of mutual wants by buyers and sellers. For exchange to happen in barter system, each person must want what the other person has. For exam…

Answer

1. Lack of double coincidence of wants 2. Lack of common measure of value 3. Lack of divisibility 4. Problem of storing wealth 5. Lack of standard of deferred payments…

Answer

1. Animal money (cow, sheep) 2. Commodity money (shells, precious stones, rice) 3. Metallic money (gold, silver, copper) 4. Paper money (currency notes) 5. Bank money (demand deposits, cheques)…

Answer

According to functional definition, money is anything that performs four basic functions: (a) serves as a medium of exchange, (b) acts as a standard unit of value, (c) serves as a standard of deferred…

Answer

According to legal definition, money is what the law says is money. Anything which the government declares as money becomes legal tender and cannot be refused in payments for transactions. In India, p…

Answer

Narrow Money: Includes currency held by public and demand deposits with banks. Has high liquidity and is easily available for transactions. Broad Money: Includes narrow money plus time deposits with …

Answer

Full-bodied money is money whose value as a commodity is equal to its value as money. For example, a silver rupee coin during British period had commodity value (value of silver) equal to its face val…