A Medium of Exchange Must Be

question 190

Multiple Choice

A medium of exchange must be

• A)approved by the government
• B)socially acceptable in exchange for goods and services
• C)easy to reproduce
• D)used to eliminate specialization and the division of labor
• E)used when a system of barter exists

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Definitions:

Allocative Efficiency

A state of the economy in which production represents consumer preferences; in other words, every good or service is produced up to the point where the last unit provides a utility equal to its cost of production.

Technological Advance

The progress or development in technology, leading to new products, processes, or systems.

Preferred Mix

The optimal combination or assortment of goods, services, investments, or resources desired by an individual, firm, or economy.

Inverted-U Theory

A concept suggesting that there is an optimum level of a variable, beyond which its effect begins to decline or become negative, often applied to the relationship between income inequality and economic development.