A monetary system is preferable over the barter system because it
A) reduces transaction costs.
B) is easier to track by the government.
C) limits cash leakages.
D) is determined by the Congress.

Question

Quizplus · Accepted Answer

A monetary system reduces transaction costs as it provides a commonly accepted medium of exchange that eliminates the need for direct exchange of goods or services. In a barter system, two parties may not have matching wants and needs, which creates transaction costs to find another trade partner.

A Monetary System Is Preferable Over the Barter System Because