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Exchange theory model is divided into three phases, namely: Encode with language, Message in medium, and Receive and interpret.

Communicator A is the sender of the message, and will first encode the message with language. Encoding is the process of transforming or putting message into an understandable form such as language. The next phase is the message will be in medium. It is neither in the sender nor in the receiver. Examples of medium are computers for chatting, cellular phone for texting, and etc. And the last phase is the receive (receiving) and interpret (interpreting) of the message which is also known as decoding. After the three phases, the message will be received by Communicator B. Communicator B may have comments, approval, disapproval, answers, or reactions on what Communicator A said. And these will be communicator B's feedback to the message he/she received and his/her feedback will also undergo the three phases of the exchange theory communication model.

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