Medium of Exchange : The most important function of money is to remove the difficulties of barter exchange. In a barter system, there was a need for double coincidence of wants. A person who wants to sell a cow and buy a goat has to look out for a person who wants to sell a goat and buy a cow. There also arises the problem of indivisibility in such goods. But with the invention of money, goods can be exchanged at any time and any place. The problem of indivisibility is also eliminated since money is available in all denominations.