Using money as a unit of account lowers information costs compared to barter exchanges.

Question

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In a barter exchange, each person would have to identify a trading partner who has what he wants and wants what he has. This requires a lot of information, time, and effort. By using money as a unit of account, individuals can more easily compare the value of different goods and services and conduct transactions more efficiently.

Using Money as a Unit of Account Lowers Information Costs