3. Describe the important role played by money as a medium ofeconomic exchange.

Answered: 3. Describe the important role played…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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3. Describe the important role played by money as a medium ofeconomic exchange.

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Money can be defined as an object which can be used for the exchange of goods and services. It replaced the barter system in the economy.

The barter system involved the exchange of goods in exchange of goods which was the concept of CC economy that is commodity -commodity economy.

The very basic and primary function of money is to act as a medium of exchange.

Medium of exchange is a system which helps in the sale and purchase of goods and services. In present the medium of exchange which is accepted as a standard is the Currency.

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