How does money differ from barter?
(1 point)
Responses
Money is mostly important as a way to get goods and services.
Money is mostly important as a way to get goods and services.
Money is used to exchange goods and services.
Money is used to exchange goods and services.
Money has value only because people agree that it has value.
Money has value only because people agree that it has value.
Money has been used for thousands of years.
Money differs from barter in several ways:
1. Money is mostly important as a way to get goods and services, whereas barter involves the direct exchange of goods and services without the use of money.
2. Money is used as a universal medium of exchange, facilitating transactions between parties who may have different needs and preferences. On the other hand, barter requires a double coincidence of wants, meaning both parties must desire the goods or services each other has to offer.
3. Money has value only because people agree that it has value. It is a socially accepted medium of exchange, backed by the trust and confidence of the people using it. In contrast, barter relies on the inherent value of the goods or services being exchanged.
4. Money has been used as a form of exchange for thousands of years, while barter was the primary method of trade before the invention of money. The introduction of money has greatly increased the efficiency and convenience of trade.
pick one ofthe provided answer choices
Money is mostly important as a way to get goods and services.
Money differs from barter in several ways:
1. Medium of exchange: In a barter system, goods and services are directly exchanged for other goods and services without the use of any intermediate medium. On the other hand, money acts as a widely accepted medium of exchange that facilitates the trade of goods and services. Instead of exchanging goods directly, people can use money to buy the goods or services they desire.
2. Unit of account: Money serves as a common unit of account that allows for the comparison of the value of various goods and services. It provides a standardized measure of prices and facilitates economic calculations and comparisons. In a barter system, there is no common unit of account, making it difficult to determine the relative value of different goods and services.
3. Store of value: Money can be easily stored and saved for future use. It retains its value over time and can be used to make purchases at a later date. In contrast, in a barter system, goods and services may not have the same ability to retain their value over time. For example, perishable goods may not be easily stored and saved for future use.
4. Divisibility and fungibility: Money is highly divisible, meaning it can be divided into smaller units to facilitate transactions of various sizes. It is also fungible, meaning one unit of money is equivalent to another unit of the same denomination. This allows for efficient exchange and easy comparison of value. In barter, however, dividing goods into smaller units for exchange can be challenging, and the exchange of goods may not always be straightforward due to differences in quality, quantity, or other attributes.
It's important to note that the value of money is based on a shared belief and agreement within a society. While money itself may not have inherent value, people assign value to it because it enables them to acquire goods and services. This trust in the value of money is crucial for its functioning in an economy.
To learn more about money and barter, you can explore economic textbooks or online resources that cover the topic of monetary systems and the history of money.