Final answer:
Money functions as a medium of exchange, a store of value, and a unit of account, facilitating trade by avoiding the limitations of barter and providing a unified measure of value for transactions.
Step-by-step explanation:
A medium of exchange is a crucial function of money, acting as an intermediary in the exchange of goods and services. It simplifies transactions by eliminating the complexities of the barter system. Money must be widely accepted, and people need to have confidence that it will retain its value over time, ensuring that it can serve as both a medium of exchange and a store of value. Additionally, money serves as a unit of account, providing a common measure to express the value of goods and services, which makes trade more straightforward.
In summary, money enables people to trade without the need for a direct exchange of goods, and instead, they can use money to purchase what they desire. Money has evolved from bartering items like cowry shells and precious metals to more sophisticated forms like coins, currency, and digital payments in society.