Use of money overcomes the drawbacks of barter system of exchange in the following manner:
(i) With the introduction of money, double coincidence of wants is no longer needed.
(ii) Money facilitates storage of value which is difficult in barter system.
(iii) Money facilitates satisfaction of wants even in smaller units which is not possible in barter system.
(iv) Money serve as a medium of exchange. Accordingly, scope of exchange has greatly widened.
