A medium of exchange must be
A)approved by the government
B)socially acceptable in exchange for goods and services
C)easy to reproduce
D)used to eliminate specialization and the division of labor
E)used when a system of barter exists

Question

Quizplus · Accepted Answer

A medium of exchange must be socially acceptable in exchange for goods and services. This means that people must be willing to accept it as payment for their goods and services. It does not necessarily need to be approved by the government or used to eliminate specialization and the division of labor. It also should not be easy to reproduce as this would lead to inflation and a loss of value. While a medium of exchange could be used in a barter system, it is not necessary for it to exist.

A Medium of Exchange Must Be