Currency Exchange
Money is any medium that is universally accepted in an economy by sellers of goods and services as payment and by creditors as payment for debts. Money serves as a medium of exchange; indeed, without money, we would have to resort to barter in doing business. Barter is simply a direct exchange of goods and services for other goods and services. For instance, a wheat farmer who wants a pair of eyeglasses must find an optician who, at exactly the same time, wants a dozen bushels of wheat; that is, there must be a double coincidence of wants, and the elements of the desired trade must be of equal value. If there isn't a double coincidence of wants, the wheat farmer must go through several trades in order to obtain the desired eyeglasses; for example, this might involve trading wheat for a computer, then the computer for several lamps, then the lamps for the desired eyeglasses.
The existence of money means that individuals do not need to hold a diverse collection of goods as an exchange inventory. Money allows them to specialize in any area in which they have a comparative advantage and to receive money payments for their labor.
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