Question

Money is called a medium of exchange because _____.

• A. it can be easily exchanged for any commodity or service
• B. it eliminates the need for double coincidence
• C. it acts as an intermediate in the exchange process
• D. All of the above

Answer 1

The correct option is D All of the above

1. Money is a particular type of asset in an economy that people use to buy goods and services from other people or businesses.
2. A medium of exchange is something that buyers will exchange with a seller when they want to purchase goods or services from the seller.
3. While many things could be used as a medium of exchange in an economy, money is the most common and useful medium of exchange in our society.
4. Money helps to facilitate trade because people in the economy generally recognize it as valuable.