Which of the following is a true statement?
A) The conversion of a barter economy to one that uses money increases efficiency by increasing the cost of exchange.
B) The conversion of a barter economy to one that uses money increases efficiency by increasing the cost to those who wish to specialize.
C) The conversion of a barter economy to one that uses money increases efficiency by reducing transactions costs.
D) The conversion of a barter economy to one that uses money does not increases efficiency.

Question

Quizplus · Accepted Answer

In a barter economy, transactions involve the exchange of goods and services for other goods and services. This process can be inefficient as it requires time and effort to find other parties who have what you need and are interested in what you have to offer. Money is a widely accepted medium of exchange that reduces transaction costs by providing a standardized measure of value. This allows for more efficient specialization and exchange, as individuals can acquire goods and services through the use of money rather than relying on barter. Therefore, the conversion of a barter economy to one that uses money increases efficiency by reducing transactions costs.

Which of the Following Is a True Statement