ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Money facilitates transactions of goods and services as a medium of exchange. Producers sell their goods to wholesalers in exchange of money. Wholesalers, in turn, sell their goods to the retailers and the retailers sell these goods to the consumers in exchange for money.

Detailed explanation-2: -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-3: -The origin of “mediums of exchange” in human societies is assumed to have arisen in antiquity as awareness grew of the limitations of barter. The form of the “medium of exchange” follows that of a token, which has been further refined as money. A “medium of exchange” is considered one of the functions of money.