Every wise person is well aware of the role that money plays in modern economic life.
The significant changes in economic life due to money are as follows.
- Ending of Barter Difficulties
- Attainment of Maximum Satisfaction
- Facility of Loans and Savings
- Importance for Entrepreneurs
Ending of Barter Difficulties:
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Money has completely eliminated all the difficulties of barter. For example
- In the absence of money, the man had to go around in search of his 'Double Coincidence of Wants'. But in the presence of money, he does not have to suffer any such pain. Money has relieved all such pains.
- Due to the absence of a "Common Standard of Value" in barter, there were great difficulties in measuring the value of money. Money has put an end to all such difficulties.
- In the absence of money, people had to face great difficulties due to the inability to divide some things into smaller parts. Money has given full support in overcoming all such difficulties.
- Before the existence of money, people had to face a lot of problems in borrowing transactions. Money has alleviated such problems by proving to be a standard and efficient medium of exchange for future payments.
- It was very difficult for people to store the values of their goods in barter. Money has helped a lot in overcoming this difficulty.
Attainment of Maximum Satisfaction:
With the advent of money, it has become possible for people to satisfy their needs more and more. Because due to the free use of money, they get compensation for their goods and services in the form of money. From which they can get the goods and services of their needs from where they can get them at a low cost. In the absence of money, they had to get compensation for their goods and services in the form of other goods and services. Sometimes the more needy person was forced by the severity of his need to rely on obtaining another comparable item. As a result, maximum satisfaction of needs could not be possible. Apart from this, due to the custom of using money, it is also possible to predict what kind of goods people are asking for. Then, in the light of this information, goods, and services can be provided, due to which the maximum satisfaction of the needs is possible.
Facility of Loans and Savings:
Thanks to money, great ease has been created in the process of loan transactions and savings. In the absence of money, people had to face various difficulties in relation to these two things. In the presence of money, people take loans in the form of money for various purposes and repay the loan with its help. Both the lender and the borrower are satisfied with future payments and receipts.
Thanks to money, people have become able to save. And it is the result of these savings that in the present day, great amazing and revolutionary developments are being seen in the industrial and commercial sectors. Big industries, manufacturing enterprises and commercial banks are flourishing on the basis of loans provided by people, which are the result of savings.
Importance for Entrepreneurs:
Money has greatly helped employers in fulfilling their employer duties and increasing their workforce efficiency. For in the absence of money every employer had to waste much of his time and energy in the barter of his manufactured articles and the raw materials necessary for his industry, and the articles of consumption for his own consumption. Also, the highly beneficial principle of division of labor, on which the modern wealth system is based, was not viable in the absence of money. As a result, employers and consumers were deprived of all the benefits that come with this rule.
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The inventory of money solved one of the most critical problems related to financing and economy. Prior to the propagation of money,people were to "commute" and "exchange" products of same value.And, that was not an easy task to trade and fill the economic needs, tbh.
Just like you mentioned, there would have been harder tasks as to barter or make loans out of wealth and this society there would have been no existence of pragmatic capitalism - of which we see in the modern world this date.