The use of money for transactions
A)makes specialization of labour more difficult.
B)increases the use of barter.
C)enables humanity to satisfy all wants.
D)makes exchange easier and thus promotes the specialization of labour.
E)fosters self- sufficiency.

Question

Quizplus · Accepted Answer

Money makes exchange easier by providing a universal medium of exchange, which facilitates the specialization of labour. This, in turn, enables individuals and firms to focus on producing goods and services that they have a comparative advantage in, which improves efficiency and raises living standards. Money also helps to overcome the problem of the double coincidence of wants that arises in a barter economy, where two parties have to agree to exchange goods and services that both want.

The Use of Money for Transactions