Explain how the introduction of money has led to the expansion of markets.
Explain how the introduction of money has led to the expansion of markets.
Following observations may be noted in this regard:
(i) Introduction of money has led to the expansion of markets through the expansion of exchange. This is because barter system of exchange requires 'double coincidence of wants' while the monetary system does not.
(ii) Money has led to the emergence of financial market and financial intermediaries (banks and other financial institutions). Availability of funds, both for the purpose of consumption and investment, has substantially increased. Consequently, markets have expanded.
(iii) Introduction of money has boosted the mobility of capital across different parts of the world. This has led to the expansion of global markets through FDI (foreign direct investment).
Following observations may be noted in this regard:
(i) Introduction of money has led to the expansion of markets through the expansion of exchange. This is because barter system of exchange requires 'double coincidence of wants' while the monetary system does not.
(ii) Money has led to the emergence of financial market and financial intermediaries (banks and other financial institutions). Availability of funds, both for the purpose of consumption and investment, has substantially increased. Consequently, markets have expanded.
(iii) Introduction of money has boosted the mobility of capital across different parts of the world. This has led to the expansion of global markets through FDI (foreign direct investment).
