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CA Foundation P4 · Chapter 8 · Question 1 of 15

The most fundamental function of money, which removes the need for a double coincidence of wants, is its function as a:

Test yourself: pick an answer

Reveal answer & explanation

Correct answer: B) Medium of exchange

Explanation

Under barter, trade requires a double coincidence of wants. Money as a generally accepted medium of exchange removes this difficulty. Store of value, standard of deferred payment and unit of account are other functions.

All 15 questions in Chapter 8Money Market MCQs with answers

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