One function of money is as a medium of exchange.Which of the following best describes medium of exchange?

Question

Quizplus · Accepted Answer

A medium of exchange refers to something that is widely accepted in society for the exchange of goods and services. Money fulfills this function as it is universally recognized and accepted as a means of payment for goods and services. Option B is incorrect as easy reproducibility can lead to inflation and reduce the value of the currency. Option C is incorrect as money actually encourages specialization and division of labor as people can specialize in a particular field and then use money to purchase goods and services they need. Option D is also incorrect as money is used to replace the need for barter.

One Function of Money Is as a Medium of Exchange