ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Currency is the most common medium of exchange accepted as a standard by all parties for settling economic transactions. In modern economies, currency as a medium of exchange has made economic dynamics possible.

Detailed explanation-2: -You just need a market in which to sell your goods or services. In that market, you don’t barter for individual goods. Instead you exchange your goods or services for a common medium of exchange-that is, money.

Detailed explanation-3: -In modern economies, the medium of exchange is currency.

Detailed explanation-4: -Money is called medium of exchange because money is a widely accepted token that can be used for exchange of any good or service. In old days, barter system was used as medium of exchange and later it was gold.

Detailed explanation-5: -Medium of exchange. Money’s most important function is as a medium of exchange to facilitate transactions. Without money, all transactions would have to be conducted by barter, which involves direct exchange of one good or service for another.