Answer:
(i) A
person holding money can easily exchange it for any commodity or service that
he or she might want.
(ii) Thus, everyone prefers to receive payments in money and then
exchange the money for things that they want.
(iii) Take the case of a shoe manufacturer. He wants to
sell shoe in the market and buy wheat. The shoe manufacturer will first
exchange shoe that he has produced for money, and then exchange the money for
wheat.
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