Money

Money is the commonly accepted medium of exchange. In an
economy which consists of only one individual there cannot be
any exchange of commodities and hence there is no role for money.
Even if there is more than one individual but these individuals do
not take part in market transactions, example: family living on an
isolated island, money has no function for them. However, as soon
as there is more than one economic agent who engage themselves
in transactions through the market, money becomes an important
instrument for facilitating these exchanges.

Money is anything that is generally accepted as a means of exchange and at the same time, act as a measure and as a store of value. Economic exchanges without the conciliation of money are known as barter exchanges or barter systems.

However, they presume the rather improbable double
coincidence of wants. Consider, for example, an individual who
has a surplus of rice which she wishes to exchange for clothing. If
she is not lucky enough she may not be able to find another person
who has the diametrically opposite demand for rice with a surplus
of clothing to offer in exchange. The search costs may become
prohibitive as the number of individuals increases. Thus, to
smoothen the transaction, an intermediate good is necessary which
is acceptable to both parties. Such a good is called money. The
individuals can then sell their produces for money and use this
money to purchase the commodities they need. Though facilitation
of exchanges is considered to be the principal role of money, it
serves other purposes as well.