Using a good as a medium of exchange confers the benefit that
A)the need to quote so many prices in trade is reduced.
B)the need for a double coincidence of wants is greatly increased.
C)the need for specialization is reduced.
D)transactions costs are increased, but they now may be paid in money terms.

Question

Quizplus · Accepted Answer

Using a good as a medium of exchange reduces the need to quote prices in trade because it serves as a common denominator for measuring the value of goods and services. This eliminates the need for a double coincidence of wants where two parties must each possess what the other wants, which can be difficult to achieve without using money as an intermediary. Specialization can still occur when a good is used as a medium of exchange. Transaction costs are also reduced when using money because they can be easily paid in money terms.

Using a Good as a Medium of Exchange Confers the Benefit