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31 July, 20:39

Why is using money as a medium of exchange preferable to bartering?

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  1. 31 July, 21:29
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    Money as a medium of exchange is more preferable because of its less cumbersome nature.

    Explanation:

    Money as a medium of exchange is more suitable because of its less cumbersome nature. Money was invented because of the inefficient nature of the barter system.

    Money is easily stored compared to a barter system.

    Money as a medium of exchange eliminates the barter system's problem of double coincidence of wants. Barter works when you trade things you own for things you want. If for example you want a bicycle and you own a goat, you have to look for someone who wants a goat and owns a bicycle willing to make an exchange, which can be quite difficult.

    Money is an acceptable medium of exchange to all parties which makes it more preferable to bartering.
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