Question

Since money acts as an intermediate in any trade, it is referred to as the ________.

• A. medium of exchange
• B. store of value
• C. measure of value
• D. measure of volume

Answer 1

The correct option is A medium of exchange

The barter system involves finding a person who has the goods that we need and needs the goods we have. This is referred to as the double coincidence of wants. To overcome this situation, an intermediatory was introduced. This intermediatory was called money. Hence, money acts as the medium of exchange.