If people lost confidence in the medium of exchange, the likely result would be

Question

Quizplus · Accepted Answer

If people lose confidence in the medium of exchange, they may resort to barter activity as an alternative means of conducting transactions. This would result in an increase in barter activity as a substitute for the weakened or discredited medium of exchange. Inflation and financial intermediation are unlikely consequences of a loss of confidence in the medium of exchange, and it is highly improbable that people would stop transacting altogether.

If People Lost Confidence in the Medium of Exchange, the Likely