Barter System Is Less Desirable Than Using Money for Exchange

question 219

Multiple Choice

Barter system is less desirable than using money for exchange because:

• A)​it is a more inefficient and a time-consuming process.
• B)​gold and silver are risky and inconvenient to transport.
• C)​it tends to promote inflation.
• D)​gold and silver are relatively scarcer than other commodities.

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Definitions:

Riskier Investment

An investment option that carries a higher probability of losing money but also the potential for higher returns.

Liability

An obligation that an individual or entity has to another individual or entity, often involving the payment of money.

Interest

The cost that creditors charge for use of their capital.

Moral Hazard

The risk that one party to an agreement can change their behavior to the detriment of another after the transaction has taken place, often due to asymmetrical information.