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Question

Introduction of ___________ removed difficulties of barter system.

A
metals
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B
bank
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C
money
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D
shares
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Solution

The correct option is C money

Barter system of exchange had many difficulties like lack of double coincidence of wants, lack of a common unit of value, difficulty of future payments or contractual payments and difficulty of storage of value and transfer of value.

Introduction of money which refers to a common medium of exchange that is issued under the law of government and acts as a legal tender for the whole country removed the difficulties of barter system through its various following functions:

1. Common medium of exchange

2. Store of value

3. Common measure unit

4. Serve as the standard of deferred payments


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