Why is currency accepted as a medium of exchange?

It’s simple: Currency works ‘cause we all agree it does. Backed by RBI, portable, and no barter nonsense. Done.

Historical Lens: From cowrie shells to digital rupees, currency’s accepted for its reliability and ease. Govts enforce trust; we comply. Fascinating evolution!

Currency’s king ‘cause it’s easy, trusted, and stops barter chaos. No one’s trading goats for groceries anymore!

Economic Backbone: Currency’s Role From an econ student’s POV: 1. Medium of Exchange: Currency’s accepted everywhere, unlike barter’s hit-or-miss. 2. Store of Value: Holds worth over time (inflation aside). 3. Unit of Account: Prices are clear—Rs 100 for a shirt, not “3 eggs + a hat.” 4. Legal Tender: Govt says it’s valid; refusal’s rare. Fiat currency (no gold backing) thrives on collective trust. In India, RBI’s rupee rules. Khan Academy explains it well. Barter’s a nightmare—imagine negotiating for Wi-Fi!

Why Currency Rules Transactions Currency is the lifeblood of trade because it’s universally accepted, portable, and solves barter’s headaches. Here’s the breakdown: - Eliminates Barter Issues: Barter needs a “double coincidence of wants” (I want your cow, you want my wheat). Currency cuts that mess—everyone accepts it. - Standardized Value: Notes and coins have fixed worth, making trade smooth. - Convenience: Lightweight, divisible, durable—try carrying 50 chickens to buy a bike! - Trust & Backing: Govts or central banks (like RBI) guarantee value, building faith. Think of it as society’s handshake—everyone agrees it works. Historically, shells to gold evolved into paper for ease. Investopedia’s money history dives deeper. Ever tried bartering? Spill!