Suppose the economy experiences a greater degree of specialization.Which of the following is likely to occur?

Question

Quizplus · Accepted Answer

Greater specialization means that individuals and firms are becoming more efficient in producing specific goods or services, which would require more specific knowledge and skills. As a result, it would be more difficult to negotiate an exchange rate between all pairs of goods, as each good has its own unique value and characteristic. This makes it more necessary and practical to use a common medium of exchange, such as money, rather than relying on barter or double coincidence of wants.

Suppose the Economy Experiences a Greater Degree of Specialization