How is money used in everyday life? Explain with examples.

1. Money, the primary means of transaction, is of great importance in our everyday life. It is the most accepted mode of carrying out almost every transaction and exchange.

2. Money is used in obtaining the basic necessities of life including food, clothing, and shelter. It is also essential in getting access to services such as education, transportation, healthcare services, sanitation and other means of entertainment.

3. Money forms the basis of almost every transaction and therefore is the basis of business and trade activities. It is thus, the most significant tool that helps in the smooth functioning and growth of the economy.

NOTE – Money is the standard of almost every transaction in the 20^th century. Before the use of money, people used to engage in the double coincidence of wants wherein they used to buy and sell in terms of commodities such as giving of rice in return for shoes. However, this practice always required a coincidence in the needs of both the parties. In comparison, money is a suitable mode of payment which is acceptable by almost every person and has therefore contributed in easing out the mode of payment.