Money is the medium of exchange that is accepted for its ability to enable people of different needs, to purchase or exchange the value of goods and services smoothly without the difficulties and complexities of a barter system.
Barter can be impossible as shown by these examples...
If a Dentist on holidays was seeking a meal, he would be required to find a Chef with a toothache.
And fractional barter can also be impossible such as finding a shop that will exchange a pair of socks for 1 KG of fish, or 1/1000th of a Television etc.
So, Money as a medium of exchange allows each of us to buy the goods and services that everyone else produces!
It is important that we realise that money is the medium of exchange, and not the other way around... Money is anything that we define as performing this function, and to perform as this, it must be acceptable to everyone.
Money can be defined as the medium of exchange that is accepted as replacing the clumsy system of barter.
