ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In economics, a medium of exchange is any item that is widely acceptable in exchange for goods and services. In modern economies, the most commonly used medium of exchange is currency.

Detailed explanation-2: -Currency is a medium for exchange of goods and services.

Detailed explanation-3: -Medium of Exchange: Right from the beginning, money has been performing the important function of medium of exchange in the society. Money facilitates transactions of goods and services as a medium of exchange. Producers sell their goods to wholesalers in exchange of money.

Detailed explanation-4: -Money is a liquid asset used to facilitate transactions of value. It is used as a medium of exchange between individuals and entities. It’s also a store of value and a unit of account that can measure the value of other goods.

Detailed explanation-5: -Currency is the most common medium of exchange accepted as a standard by all parties for settling economic transactions.