A monetary system is preferable over the barter system because of the problems associated with
A) cash leakages.
B) the double coincidence of wants.
C) the law of diminishing marginal utility.
D) the law of increasing relative costs.

Question

Quizplus · Accepted Answer

The barter system requires a double coincidence of wants, meaning that two parties must have a desired good or service that the other wants in order to conduct a transaction. This makes trading difficult and inefficient. In contrast, a monetary system uses a standardized unit of exchange, such as currency, which eliminates the need for the double coincidence of wants and allows for easier and more efficient transactions.

A Monetary System Is Preferable Over the Barter System Because