Which of the following characteristics is required of a good medium of exchange?

Question

Quizplus · Accepted Answer

A good medium of exchange should have low uncertainty over its value in trade, meaning that both parties involved in the exchange should have a clear understanding of what the item is worth. High intrinsic value (A) is not necessary for a medium of exchange, as its value is derived from its usefulness in trading for other goods and services. Deteriorating exchange value over time (C) would make it a poor choice as a medium of exchange, as people would be less willing to accept it in the future. A high rate of return (D) is also not necessary for a medium of exchange, as it is not meant to be an investment but rather a tool for facilitating trade.

Which of the Following Characteristics Is Required of a Good