Question

how money serves as a medium of exchange

Answer 1

The ​following points may help you:

a. Money is an important medium of exchange for any transaction between two or more people.
b. It gives purchasing power to the individual and allows for the purchase of goods and services,
c. In earlier times, individuals used grains, cattle as money.A barter system was used as an  old method of exchange.  People exchanged services and goods for other services and goods . This was possible only in a simple economy but after the development of economy, direct exchange of goods without the use of money, was not possible.
d. Development of economies, increase in trade, development of currency led to using of money as a medium of exchange
e. It is used as an intermediate in the exchange process.