How does (a) money promote specialisation and (b) enable production to take place ahead of consumption ?
Dear student,
Money has overcome the drawbacks of barter system and it has evolved as an efficient medium of exchange.
Money promotes specialisation as it is universally accepted as a medium of exchange. As it is accepted as a medium of exchange it promotes productivity and increases efficiency.
Money enable production to take place ahead consumption as money provides store of value. If production exceeds consumption, it is stored by the time its consumption takes place.
Regards
Money has overcome the drawbacks of barter system and it has evolved as an efficient medium of exchange.
Money promotes specialisation as it is universally accepted as a medium of exchange. As it is accepted as a medium of exchange it promotes productivity and increases efficiency.
Money enable production to take place ahead consumption as money provides store of value. If production exceeds consumption, it is stored by the time its consumption takes place.
Regards
