Without money to act as a medium of exchange,
A)all exchanges that take place under a monetary system would still take place.
B)the standard of living in the economy would increase.
C)barter exchange would allow for a much simpler yet increased standard of living.
D)the increased transactions costs associated with trading would prohibit some trades from taking place.
E)independence in production would lead to a proliferation of new products.

Question

Quizplus · Accepted Answer

Without money, individuals and firms would have to rely on barter exchange, which can be more costly and time-consuming than monetary exchange. This would result in increased transaction costs, making some trades too costly to take place. Therefore, the correct answer is D.

Without Money to Act as a Medium of Exchange