Money and its Role

Barter system means exchange of one

Barter system means exchange of one kind of goods and services for another kind of goods and services. There is no involvement of money in this system

Money arose because barter had serious

Money arose because barter had serious difficulties. Direct exchange often failed when two people did not want each other’s goods, when goods could no

Money is something generally accepted by

Money is something generally accepted by society as a medium of exchange, a unit of account, a store of value, and a means of making payments in futur

Money is received by the seller

Money is received by the seller and paid by the buyer. For example, Rs. 10 paid for a pen shows money being used to exchange one thing for another.

The value of a good

The value of a good is calculated as Value of good = Price of the good × Quantity of the good. For example, if rice costs Rs. 20 per kilogram and 25 k