Why are transactions made in money?

cbse
economics
money-and-credit
cbse-class-10
cbse-class-10-social

#1

Why are transactions made in money?

Answer:

  • A person holding money can easily exchange it for any commodity or service that he or she might want.
  • Thus, everyone prefers to receive payments in money and then exchange the money for things that they want.
  • Take the case of a shoe manufacturer. He wants to sell shoe in the market and buy wheat.The shoe manufacturer will first exchange shoe that he has produced for money and then exchange the money for wheat.