Question

why money is called medium of exchange

Answer 1

Money eliminates coincidence of wants.
A person holding money can exchange it for any goods or services that the or she might need
Since money acts as an intermediate in the exchange process,it is called the medium of exchange

Answer 2

Money is called the medium of exchange as it is something which is used for transactions.

It is money which is used by people to get the commodity of his choice.

Where earlier, different products were used for exchange, now money is used.

Money includes coins, notes and even e-transactions are valid now.