The existence of money in an economy promotes efficiency by

Question

Quizplus · Accepted Answer

The existence of money in an economy facilitates trade by providing a medium of exchange, which in turn allows for greater specialization. This leads to increased efficiency in the allocation of resources and production of goods and services. Money also allows for the accumulation of wealth, which can be used for investment in new technologies and production processes. Option A is incorrect because the distribution of income depends on the distribution of resources and technology, not money. Option B is incorrect as money does not create incentives to be self-sufficient, rather it promotes specialization and exchange. Option D is incorrect as the formation of corporations as legal entities is a result of legal frameworks, not money.

The Existence of Money in an Economy Promotes Efficiency by