Which of the following best defines money in economics?

The definition of money in economics encompasses three primary functions: it serves as a medium of exchange, a unit of account, and a store of value.

As a medium of exchange, money facilitates the buying and selling of goods and services, eliminating the inefficiencies of barter systems where direct exchanges of goods are required. Next, as a unit of account, money provides a consistent measure for valuing goods and services, making it easier for individuals and businesses to compare prices and track economic activity. Lastly, as a store of value, money allows individuals to save and defer consumption, as it maintains its value over time and can be used in the future.

This comprehensive definition captures the essential characteristics that are widely accepted in economics, distinguishing it from merely physical assets or fluctuating currencies, which do not encompass all three functions of money. Thus, the first choice accurately reflects the multifaceted nature of money, making it the best answer.