Why is money called a 'medium of exchange'?

Explanaion:

In modern times money is used as a medium of exchange. It is called a medium of exchange because money is widely accepted as a method of payment for exchanging any good or service.

Money is universally acceptable and acts as an intermediate in the process of exchange.

Before the invention of money, the barter system was used, wherein commodities were used as a medium of exchange; one good was exchanged with another. In the medieval age, gold was used as a medium of exchange.

Besides being a medium of exchange, which is a primary function of money, the other functions of money are:

Acts as a store of value.

Acts as a unit of account.

It is a standard of deferred payment.

Final Answer:

Hence, the correct answer is option D: Because money acts as an intermediate in the process of exchange.