What is "medium of exchange"

Medium \Me"di*um\, n.; pl. L. Media, E. Mediums. [L. medium the middle, fr. medius middle. See Mid, and cf. Medius.]

1. That which lies in the middle, or between other things; intervening body or quantity. Hence, specifically:

   1. Middle place or degree; mean.

      The just medium . . . lies between pride and abjection.
      --L'Estrange.

   2. (Math.) See Mean.

   3. (Logic) The mean or middle term of a syllogism; that by which the extremes are brought into connection.

2. A substance through which an effect is transmitted from one thing to another; as, air is the common medium of sound. Hence: The condition upon which any event or action occurs; necessary means of motion or action; that through or by which anything is accomplished, conveyed, or carried on; specifically, in animal magnetism, spiritualism, etc., a person through whom the action of another being is said to be manifested and transmitted.

   Whether any other liquors, being made mediums, cause a diversity of sound from water, it may be tried.
   --Bacon.

   I must bring together All these extremes; and must remove all mediums.
   --Denham.

3. An average. [R.]

   A medium of six years of war, and six years of peace.
   --Burke.

4. A trade name for printing and writing paper of certain sizes. See Paper.

5. (Paint.) The liquid vehicle with which dry colors are ground and prepared for application.

6. (Microbiology) A source of nutrients in which a microorganism is placed to permit its growth, cause it to produce substances, or observe its activity under defined conditions; also called culture medium or growth medium. The medium is usually a solution of nutrients in water, or a similar solution solidified with gelatin or agar.

7. A means of transmission of news, advertising, or other messages from an information source to the public, also called a news medium, such as a newspaper or radio; used mostly in the plural form, i. e. news media or media. See 1st media[2].

   Circulating medium, a current medium of exchange, whether coin, bank notes, or government notes.

   Ethereal medium (Physics), the ether.

   Medium of exchange, that which is used for effecting an exchange of commodities -- money or current representatives of money.

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

n. anything that is generally accepted as a standard of value and a measure of wealth in a particular country or region [syn: monetary system]

A medium of exchange is an intermediary used in trade to avoid the inconveniences of a pure barter system.

By contrast, as Othien James Jevons argued, in a barter system there must be a coincidence of wants before two people can trade – one must want exactly what the other has to offer, when and where it is offered, so that the exchange can occur. A medium of exchange permits the value of goods to be assessed and rendered in terms of the intermediary, most often, a form of money widely accepted to buy any other good.