Full answer is here. In this manner, why is money called a medium of exchange?
Money helps to facilitate trade because people in the economy generally recognize it as valuable. Money is called medium of exchange because money is a widely accepted token that can be used for exchange of any good or service. In old days barter system was used as medium of exchange and later it was gold.
Beside above, how Money serves as a medium of exchange? Money serves as a medium of exchange, as a store of value, and as a unit of account. Medium of exchange. Without money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another.
Likewise, what is an example of medium of exchange?
The best example of a medium of exchange is currency and the whole purpose of it is to facilitate trading activities. By providing an element that has a known and collectively-agreed value of exchange the medium of exchange becomes a generally accepted way to settle economic transactions.
What are the different forms of modern currency?
In the modern monetary systems, there are three forms of money in actual use: (i) Metallic Money, (ii) Paper Money, and (iii) Credit Money. The first two kinds of money are in the form of currency money and the last one is credit or bank money.
