The use of money contributes to economic efficiency because
A)governmental direction of the production and distribution of output can be avoided by using money.
B)roundabout production could not occur without the availability of money.
C)it is necessary for the creation of capital goods.
D)it promotes specialization by overcoming the problems with barter.

Question

Quizplus · Accepted Answer

Money facilitates trade by eliminating the inefficiencies of a barter system, such as the need for a double coincidence of wants, thereby promoting specialization and economic efficiency.

The Use of Money Contributes to Economic Efficiency Because