medium of exchange

(noun)

An intermediary used in trade to avoid the inconveniences of a pure barter system, such as money.

Related Terms

Examples of medium of exchange in the following topics:

  • Functions of Money

    • The main functions of money are as a medium of exchange, a unit of account, and a store of value.
    • When money is used to intermediate the exchange of goods and services, it is performing the function of a medium of exchange.
    • To be widely acceptable, a medium of exchange should have stable purchasing power.
    • Gold was popular as a medium of exchange and store of value because it was inert.
    • Moreover, it must be predictably usable as a medium of exchange when it is retrieved.

  • The Definition of Money

    • It is a medium of exchange, a unit of account, and a store of value:
    • Medium of Exchange: When money is used to intermediate the exchange of goods and services, it is performing a function as a medium of exchange.
    • It must be predictably usable as a medium of exchange when it is retrieved.
    • Economists sometimes note additional functions of money, such as that of a standard of deferred payment and that of a measure of value.
    • Distinguish between the three main functions of money: a medium of exchange, a unit of account, and a store of value

  • The Functions of Money

    • Barter is a system of exchange in which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money .
    • A medium of exchange: an object that is generally accepted as a form of payment.
    • The use of money as a medium of exchange has removed the major difficulty of double coincidence of wants in the barter system.
    • In a barter system, individuals possessing something of value could exchange it for something else of similar or greater value.
    • Analyze how the characteristics of money make it an effective medium of exchange

  • Barter and Functions of Money

    • First function of money is a medium of exchange because people use money to pay for goods and services and repay debts.
    • Medium of exchange function promotes efficiency and specialization.
    • If the inflation rate becomes too high, thenmoney as a "medium of exchange" breaks down too.
    • However, people must use money as a medium of exchange because government laws legally require people to accept money as a means of payment to repay a debt or to pay taxes.
    • This function combines the "medium of exchange" and "unit of account" of money because contracts state debts in terms of a "unit of account" and borrowers repay using the "medium of exchange.

  • Defining a Market System

    • Many markets exist, and each can be defined based on a number of characteristics, such as what is being exchanged in the market, the regulations, who is allowed to participate, and how transactions occur.
    • One defining component of markets is the medium of exchange, or the price.
    • In most American markets, the medium of exchange is dollars.
    • There are many examples of market systems.
    • Based on the level of competition in a market system, economists have identified a number of different types of structures, such as monopoly, oligopoly, and perfect competition.

  • Choosing the Right Method for the Message

    • Meeting - A personal, interactive exchange often succeeded by a written follow-up; Letter - Typically a formal method of communication suited for important messages such as proposals, inquiries, agreements, and recommendations; Video Conference - Allows people in different locations to hold interactive meetings and interviews in real time; Telephone Conference - Enables participants in different locations to share information; E-mail - Instantaneous medium for both formal notices and updates, as well as, informal exchanges; Report - Official documentation of the activities of any department or organization; Presentation - Usually comprises a formal proposal, update, recommendation, or report involving audiovisual material, slideshows, and statistics; Web-based Communication - A method typically suited for leaving contact information (such as address and phone number) or for sharing transaction details (such as order confirmation); Forum: Allows members to post information publicly and efficiently in a centralized location.
    • This medium straddles the line between informal communication and formal business interaction.
    • Meeting - This is a personal, interactive exchange often succeeded by a written follow-up.
    • E-mail - This is a instantaneous medium for formal notices and updates, as well as informal exchanges.
    • When choosing the medium, consider the audience and their reaction to the message.

  • Social Media in the Classroom

    • In recent years, social media in the classroom has become a valuable pedagogical medium.
    • Social media are computer-mediated tools that allow people, companies and other organizations to create, share, or exchange information, career interests, ideas, and pictures or videos in virtual communities and networks.
    • In recent years, social media in the classroom has become a valuable pedagogical medium.
    • Facebook for teachers is an example of another potentially useful tool for teachers in educational contexts.
    • Facebook can therefore be an effective platform for teachers to engage with students of all learning speeds outside of a traditional class environment.

  • Metal Exchange Reactions

    • Alternative methods of preparing a wide variety of organometallic compounds generally involve an exchange reaction in which a given metal is either moved to a new location or replaced by a new metal, which may include B, Al, Ti, V, Fe, Ni, Cu, Mo, Ru, Pd, Sn, Pt, Hg & Pb.
    • Five such exchange methods are outlined in the following tables.

  • Body Fluid Composition

    • The composition of tissue fluid depends upon the exchanges between the cells in the biological tissue and the blood.
    • The composition of tissue fluid depends upon the exchanges between the cells in the biological tissue and the blood.
    • The majority of these non-protein molecules have a molecular mass of less than 300 Da.
    • Most of the cytosol is water, which makes up about 70% of the total volume of a typical cell.
    • Plasma is mostly water (93% by volume) and contains dissolved proteins (major proteins are fibrinogens, globulins and albumins), glucose, clotting factors, mineral ions (Na+, Ca++, Mg++, HCO3- Cl- etc.), hormones and carbon dioxide (plasma being the main medium for excretory product transportation).

  • Introducing Exchange Rates

    • It is also regarded as the value of one country's currency in terms of another currency .
    • For example, an inter-bank exchange rate of 91 Japanese yen (JPY, ¥) to the United States dollar (USD, US$) means that ¥91 will be exchanged for each US$1 or that US$1 will be exchanged for each ¥91.
    • Exchange rates are determined in the foreign exchange market, which is open to a wide range of buyers and sellers where currency trading is continuous.
    • There is generally a higher exchange rate on documentary transactions (such as for traveler's checks) due to the additional time and cost of clearing the document, while cash is available for resale immediately.
    • Explain the concept of a foreign exchange market and an exchange rate