Which of the following will lead to the most benefit in terms of greater prosperity?
A)Several goods are recognized as mediums of exchange.
B)The government plays no role in choosing a medium of exchange.
C)A single good is recognized as a medium of exchange.
D)The medium of exchange is used only for the settlement of debts.

Question

Quizplus · Accepted Answer

When a single good is recognized as a medium of exchange, it simplifies transactions and minimizes the transaction costs of finding parties with matching demands. This facilitates economic activities and improves overall economic efficiency, leading to greater prosperity. Having several goods recognized as mediums of exchange or using the medium of exchange only for the settlement of debts does not provide the same level of simplification and efficiency. The role of the government in choosing a medium of exchange is not as critical as having a single good recognized as a medium of exchange.

Which of the Following Will Lead to the Most Benefit