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Sandeep Garg Macroeconomics Class 12 Solutions Chapter 5

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Sandeep Garg Macroeconomics Class 12 Solutions Chapter 5

Class 12 Macroeconomics Sandeep Garg Solutions Chapter 5 - Money

The chapter 'Money' is one of the most crucial chapters in Class 12 Macroeconomics syllabus. Since macroeconomics is a broader study of an economy, it assesses the role of Money as a whole.

In terms of economics, Money can be defined as a store of value or asset, which can also act as a medium of exchange in the economy. Sandeep Garg class 12 Macroeconomics solutions chapter 5 details the entire concept of Money in an economy.

Sandeep Garg Macroeconomics Class 12 Solutions Chapter 5

Important Topics in Sandeep Garg Class 12 Macroeconomics Solutions Chapter 5

It can be said that the availability of Money determines how an economy performs. It makes trade and transactions possible in an economy. Have a look at some of the key topics you have to study from Class 12 Sandeep Garg solutions Class 12 Money chapter:

Barter System

Barter system is a traditional method of exchange. Here goods are bought in return. For example, an individual might sell 1kg of wheat in exchange for a certain amount of cotton. The value of exchanging goods is to be determined accordingly. Barter system was prevalent in earlier times but is a rare practice in today's world.

Barter system is still practised in C-C economy or commodity for commodity economy. But this too has certain limitations. This system of exchange has been discussed in detail in the chapter of Class 12 macroeconomics Money.

Double Coincidence of Wants

Double coincidence of wants is the first requirement when it comes to the barter system. It implies a situation where both individuals are willing to exchange some form of commodities. They buy the commodity they require by selling the commodity they have; it is often called a ‘perfect barter exchange’. The second answer in Sandeep Garg Class 12 Macroeconomics Solutions Chapter 5 explains ‘Double Coincidence of Wants’.

Characteristics of Money

Money has to meet certain conditions to function as a medium of exchange in an economy. Thus, it must possess some mandatory characteristics.

There are four basic characteristics of Money. They are as follows:

Measure of Value- Since value of all goods and services can be expressed in monetary units, money acts as a convenient unit of account. For instance- if 1 kg of rice cost rs.100 you can buy them by giving 100 units of money.
Medium of Exchange- This is the major advantage of money, since the barter system has become extremely difficult due to the inability to find suitable people who are ready to exchange with them for a particular commodity. With the advent of money, now people do not have to wait or look for someone for exchanges, with the help of money they can buy or sell whatever and whenever they want.
Weight- When compared to the goods that are exchanged in a barter system, money is very light in weight and can be easily stored. Therefore, it is used as a store of value.
Durability- Over a prolonged period of time, it maintains the same shape, form, and substance; it does not easily decompose, deteriorate, degrade, or otherwise change over time.

To understand these characteristics in detail, you can refer to the Class 12 Macroeconomics Sandeep Garg Solution Chapter 5 Money.

Money Supply

Money supply can be termed as the extent of currency available in an economy. It is the total sum of credit flowing in an economy at any given point of time. The supply of Money is assessed in terms of deposits as well as liquid cash. The fourth answer in Class 12 macroeconomics Money solutions discusses money supply.

DDA

DDA or Demand Deposit Account is an account containing all such deposits which are to be converted into a liquid form (cash) through cheques or drafts. Funds can be withdrawn from DDA at any time without having to take prior permission. Demand Deposit Account is a contrast to the Term Deposit Account, where prior permission is required in order to access funds.

Bank Money

Bank money is demand deposits available with a commercial bank. Individuals deposit their earnings, income, or savings in a bank account. In turn, this Money is extended as a loan to lenders. Bank money can also be termed as commercial bank money.

FAQs on Sandeep Garg Macroeconomics Class 12 Solutions Chapter 5

1. How to prepare your Macroeconomics topics from Sandeep Garg Class 12 Solutions?

Macroeconomics is a branch of economics that analyzes an economy's structure, behaviour, performance, decision-making, and overall functioning. Students usually fear the unit because of descriptive concepts and various Numericals. However, with a better understanding of the subject you will be able to score well. Look below to find some important tips for exam preparations:

The first step towards preparing macroeconomics lessons would be to go through your textbook chapters in detail. This would help you get an idea of the chapter contents.
Download the Class 12 Sandeep Garg Chapter 5 PDF so that you can refer and practice from it as and when required.
Taking notes, attending lectures and studying actively are very beneficial when studying subjects like economics, as well as learning the definitions and meanings of various economic terms and even participating in discussions are beneficial.
Move from books to books. If you are studying macroeconomics from sandeep garg, read another book to enhance your understanding of macroeconomics, solve each and every question of it. Then move to a book that explains macroeconomics in more depth or attempt sample papers.
Always prepare chapter-wise and do not jump to National Income or Balance of Payments before learning about the basic concepts such as Money and Banking.

Make a note of the important topics chapter-wise and revise them from the solutions. Make sure to highlight every important point, formulae you read in Sandeep Garg book and try to revise them daily.
Read and learn the definitions, meanings and prepare graphs, tables and formulas given in the Sandeep Garg book of Economics.
Do not cram any formulae, graphs or tables, make sure you understand the concept and derivation of each formula.
Do not skip any chapter of the book. After completing your syllabus from the book, you can also test your preparation by solving sample papers and previous year question papers.

Class 12 Sandeep Garg solutions Class 12 Money contains all the important questions along with specific answers. Students can refer to the solutions for last-minute revisions before board exams

2. How many questions are there in Chapter 5 of Sandeep Garg Macroeconomics

In Chapter 5 of Sandeep Garg Macroeconomics solutions, there are six questions in total. Each answer in this chapter is backed with necessary examples to help students understand their lessons better. The first question explains the definition of barter exchange of money. The second question is all about the double coincidence of wants which explains in detail how the barter system works. Third question explains in detail characteristics of the money followed by definition of money supply, demand deposit account and bank money. You can get detailed answers to these questions from vedantu.

3. What are the characteristics of money?

Although money has various advantages. The major characteristics of Money are durability, portability, value, and security.

Medium of Exchange- Among the primary functions of money is as a medium of exchange, since it can be used for any transaction where goods or services are purchased or sold. Therefore, it is possible to exchange money for products.
Store of Value- The crucial function of money is to store and conserve it. In addition to storing money for future purposes, it is economical and convenient to store money.
Measure of Value- Money can be used to measure the value of a product or service. Essentially, the value of any product or service can be expressed in monetary terms.
Standard of Deferred Payments- In general, money is used strategically for payments that need to be made to individuals in the future or in the present.

You can refer to Sandeep Garg Macroeconomics solutions to understand each of these characteristics in detail.

4. What should I study from Chapter 5 of Macroeconomics? What are the most important questions of Chapter 5 Money?

From Chapter 5 of Macroeconomics, the 'Money', you must study topics like barter exchange, functions and characteristics of Money, bank money, DDA, demand and supply of money, role of RBI, policy tools to control money supply, money creation by banking system, and demonetisation ( newly added topic). The most important questions from the chapter being what are the characteristics of money, what is demonetisation, when does it happen in India, how the government regulates the money supply in the economy and so on.

5. What are the functions of the Central Bank?

It is a well known fact that Central banks are responsible for manufacturing notes that are issued by economies. But, despite this, the Central bank has many other functions as well which are listed below.

Functions of the Central Bank are- The currency regulator or bank of issue, The bank to the government, The custodian of cash reserves, The custodian of international currencies, The lender of last resort, The clearing house for transfer and settlement The credit controller and the the credit controller protects the interests of depositors.

6. How to Attempt the CBSE Class 12 Economics Exam?

You may want to make skeletons of answers you intend to write for questions that have internal choices. Consider a pattern. For example, if you start with long answer questions, finish by drafting skeletons of your answers. Make graphs whenever possible this will help you fetch full marks for the question, do not forget to make neat and clean graphs with proper labelling. Always start the answer by giving a brief definition or description. The right approach to solve numerical questions is to do it step-by-step, do not skip any step, the marks of the question is divided among steps. Last but not the least, do not forget to revise the exam before submission.