Economics Multiple Choice Question – 29 March 2019

Which of the following is a consequence of using money rather than a barter system?

Select ONE answer:

1. It decreases specialisation
2. It decreases the ease of borrowing
3. It decreases the need for a double coincidence of wants
4. It decreases trade

Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Economics KS5 classes.

The answer is 3

1. It will increase specialisation because money is easier to exchange for an economic good.
2. It will increase the ease of borrowing because money is easier to exchange for an economic good
3. Correct: It will decrease the need for a double coincidence of wants because there is no longer the need to find two persons whose disposable processions mutually match each other’s wants.
4. It will increase trade because money is easier to exchange for an economic good.

 

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