Without Money to Act as a Medium of Exchange

question 31

Multiple Choice

Without money to act as a medium of exchange,

• A)the standard of living in the economy would increase.
• B)barter exchange would allow for a much simpler yet increased standard of living.
• C)the increased transactions costs associated with trading would prohibit some trades from taking place.
• D)independence in production would lead to a proliferation of new products.
• E)all exchanges that take place under a monetary system would still take place.

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Definitions:

Market Price

The current price at which a good or service can be bought or sold, determined by the intersection of demand and supply forces in the market.

Quantity Demanded

The total amount of goods or services that consumers are willing and able to purchase at a given price in a specific time period.

Quantity Supplied

The quantity of a product or service that suppliers are ready and capable of selling at a particular price during a certain timeframe.

Demand Curve

A visual depiction that illustrates the connection between a product's price and the amount consumers are willing to buy at different prices.