How did money become the medium of exchange?

Question

How did money become the medium of exchange?

Answer 1

Money as medium of exchange :

There have been many historical arguments regarding the combination of money's functions, some arguing that they need more separation and that a single unit is insufficient to deal with them all. One of these arguments is that the role of money as a medium of exchange is in conflict with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate. 'Financial capital' is a more general and inclusive term for all liquid instruments, whether or not they are a uniformly recognized tender.

Medium of exchange :

Money is used as an intermediary for trade, in order to avoid the inefficiencies of a barter system, which are sometimes referred to as the 'double coincidence of wants problem'. Such usage is termed a medium of exchange.

Answer 2

at one time grain was a medium of exchange in China. Therefore grain was money then. If you are talking about coin or paper then shells and certain rocks are the first examples. The why it began to be used is not entirely clear but it seems difficult to carry around everything you have and want to trade and then carry back everything you have traded.

Answer 3

people saw that barter system had a major flaw of double coincidence of want... meaning that if i wanted chicken then you must want carrots that i had to offer to you... as this was very rare to be found so money emerged as a meduim of exchange making it one of the characterstics of money along with unit of account and store of value.

Answer 4

When the United States became a nation the founding fathers agreed on money as a medium of exchange.

Answer 5

buying and selling