As the Payments System Evolves from Barter to a Monetary

question 73

Multiple Choice

As the payments system evolves from barter to a monetary system,

• A)commodity money is likely to precede the use of paper currency.
• B)transaction costs increase.
• C)the number of prices that need to be calculated increase rather dramatically.
• D)specialization decreases.

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Definitions:

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, resulting in market stability.

Supply Curve

A graphical representation showing the relationship between the price of a good and the quantity of the good that producers are willing to supply.

Tax

A compulsory financial charge or other levy imposed by a government to fund public expenditures.

Demand Function

A mathematical representation showing the relationship between the quantity demanded of a good and its price, along with other factors affecting demand.