Frequently Asked Questions - money

FAQs - money

Explain why it is better for individuals to use money rather than barter. [6 marks]

Explanation:

Involves comparing the importance of function of money as a medium of exchange as compared to barter (the direct exchange of goods and services for other goods and services without using money )

The problem with barter was that it relied on a double coincidence of wants, this wasn’t always possible and the use of money as a means of exchange avoids this.

Money is also significantly better as a measure of value, a store of value and a standard for deferred payments.

TAGS: barter, medium of exchange, money