The medium of exchange function of money allows an economy to avoid the problem of
A) lack of a double coincidence of wants.
B) unemployment.
C) loss of purchasing power during a period of high inflation.
D) rising interest rates.

Question

Quizplus · Accepted Answer

The medium of exchange function of money allows individuals to use money as a common medium for trade, which solves the problem of lack of a double coincidence of wants. In other words, people don't have to find someone with whom to barter their goods or services; they can simply use money to exchange for whatever they want. The other options listed are not directly related to the medium of exchange function of money.

The Medium of Exchange Function of Money Allows an Economy