Question

How does money act as a medium of exchange ? explain

Answer 1

Earlier if person want to buy anything they have exchange the material. But now people use money to buy something.

Answer 2

A medium of exchange is an intermediary instrument used to facilitate the sale, purchase or trade of goods between parties. For an instrument to function as a medium of exchange, it must represent a standard of value accepted by all parties. In modern economies, the medium of exchange is currency.