Question

Read the following statements carefully: 
Statement 1: Money is a commodity which is generally accepted as a medium of exchange. 
Statement 2: Money solved the problem of double coincidence of wants. 
In the light of the given statements, choose the correct alternative from the following:

• A. Statement 1 is true and Statement 2 is false.
• B. Statement 1 is false and Statement 2 is true.
• C. Both statements 1 and 2 are true.
• D. Both statements 1 and 2 are false.

Hint:

Money eliminates the need for double coincidence of wants by acting as a universal medium of exchange in economic systems.

Answer 1

The Correct Option is C

Statement 1: Money functions as a universal medium of exchange, a fundamental element in economic exchanges.
Statement 2: Money rectifies the inefficiencies of barter, specifically the requirement for a double coincidence of wants, by facilitating indirect transactions.