What function does money serve when used as a medium of exchange?

When money is used as a medium of exchange, it primarily serves the function of facilitating transactions between parties. This role is crucial in an economy because it allows individuals and businesses to trade goods and services efficiently, eliminating the complications associated with bartering, which relies on a direct exchange of goods. The use of money as a medium of exchange streamlines these transactions by providing a universally accepted item for payment, thus enabling smoother and quicker exchanges.

In this context, the other functions of money, such as serving as a unit of account or a store of value, play supportive roles in the economy but are not directly related to the immediate transaction process. While measuring economic stability is an important economic concept, it does not pertain to the direct function of money in exchanges. Therefore, the choice that highlights money's role in facilitating transactions captures its essential function as a medium of exchange.