What is money? And what makes money different than any other commodity in the
economy?
Money is a commodity that is generally recognized as a medium of exchange in economic
transactions. It is the primary indicator of wealth and the means by which prices and values are
communicated. As currency, it transfers anonymously from person to person and nation to
nation, facilitating trade. Money is an essential tool in any monetary economy because it serves
four distinct functions that can assist in resolving barter trade issues. One of these functions is
serving as a medium of exchange. When money is used as a medium of exchange, the
inefficiencies of the barter system disappear. The introduction of money as a medium of
exchange in the economy eliminated the need for a double coincidence of desires because
individuals could now accept money in exchange for goods and services.