Final answer:
Trade using money as a medium of exchange facilitates transactions by eliminating the need for a double coincidence of wants that the barter system requires. Money also acts as a store of value and a unit of account, which enables easier future planning and comparison of value.
Step-by-step explanation:
Trade Using Money as a Medium of Exchange
Trade using money as a medium of exchange enables a more efficient and scalable economy compared to the barter system. Money facilitates transactions by serving as an intermediary that is widely accepted in exchange for goods, labor, and financial capital. By using money, an individual can provide a service or sell a product and receive money in return, which they can then use to purchase exactly what they need when they need it. This system removes the need for a double coincidence of wants, which is often an obstacle in barter systems, where one must find someone who not only has the desired goods or services but also wants what is being offered in exchange.
Moreover, money serves as a store of value, allowing individuals to preserve wealth and make purchases in the future without the limitations of perishable goods. It also acts as a unit of account, providing a common measure for valuing goods and services, making transactions straightforward and comparable.