Money is called a medium of exchange because it serves as a common mode through which people can buy what they want and sell what they have. The use of money removes the barter system and thus ended the concept of double coincidence of wants. Money makes it easier to carry out trading activities. It acts as an intermediate in the exchange process and facilitates the buying and selling of things. A person having money can buy anything that he/she wants, unlike in the barter system. He/she can sell his/ her goods in the market in exchange for money and can buy other things with that money. In simpler terms, money has made the exchange process simpler.
