(Mises.org) In a market economy a major service that money provides is that of the medium of exchange. Producers exchange their goods for money and then exchange money for other goods.
As production of goods and services increase this results in a greater demand for the services of the medium of exchange (the service that money provides).
Conversely, as economic activity slows down, the demand for the services of money follows suit.
The demand for the services of the medium of exchange is also affected by changes in prices. An increase in the prices of goods and services leads to an increase in the demand for the medium of exchange.
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