Acting as a 'medium of exchange' is an important function of ___________________.
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. money.
Acting as a medium of exchange is an important function of money. Money facilitates trade by eliminating the limitations of the barter system, where goods had to be exchanged directly. It provides a common measure of value, making transactions easier and more efficient. By serving as a medium of exchange, money enables people to buy and sell goods and services conveniently, promotes specialization, and supports the smooth functioning of markets, thereby playing a crucial role in the economy’s growth.