Medium of Exchange - Explained
What is a Medium of Exchange?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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What is a Medium of Exchange?
First, money serves as a medium of exchange, which means that money acts as an intermediary between the buyer and the seller. Instead of exchanging accounting services for shoes, the accountant now exchanges accounting services for money. The accountant then uses this money to buy shoes. To serve as a medium of exchange, people must widely accept money as a method of payment in the markets for goods, labor, and financial capital.
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