Enumerate the types of money and discuss the various economic functions served by it.

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Q) “Enumerate the types of money and discuss the various economic functions served by it. (15 marks, 250 words)

मुद्रा के प्रकारों की गणना कीजिए और इसके विभिन्न आर्थिक कार्यों की चर्चा कीजिए।”

Demand of the Question– The question demands understanding of basics of economy, origin, use and functioning of money.

Directive Word– Enumerate- This keywords demands mentioning types of money, along with short descriptions with examples. Discuss- This keyword demands listing of functions of money, its pros and cons.

Structure of the Answer

Intro– Mention the definition of money, and its functions in economy.

Body– In the first part, give description of functions of money, and add examples. In the second part, mention what are the pros and cons of money in an economy. In the last part, mention what are the alternatives and when and why and upto what limits they are used.

Conclusion– State the importance of money in an economy, along with it mention alternatives that have emerged with shortfalls of both.

Part of Syllabus– GS Paper 3- Indian Economy