Which of the following is true if a nation's official money fails to serve as a medium of exchange?
A)Nothing will replace money to help facilitate exchange.
B)There will be an increase in economic efficiency.
C)Resources will divert from production to exchange.
D)Transactions costs of exchange will decrease.
E)Fewer barter exchanges will be completed.

Question

Which of the following is true if a nation's official money fails to serve as a medium of exchange?​
A)Nothing will replace money to help facilitate exchange.
B)There will be an increase in economic efficiency.
C)Resources will divert from production to exchange.
D)Transactions costs of exchange will decrease.
E)Fewer barter exchanges will be completed.

Quizplus · Accepted Answer

If the official money fails to serve as a medium of exchange, resources will divert from production to exchange as people resort to other means of exchanging goods and services, such as barter or alternative currencies. This will result in a decrease in economic efficiency.

Which of the Following Is True If a Nation's Official