Diana tutors Tiago for two hours before his economics final exam.Tiago pays Diana through a direct transfer from his bank on a payment app.Diana then uses her debit card to buy pizza for dinner from the local pizza parlor.This is an example of
A)the exchange of money facilitating production and trade.
B)trade between two people who each have a good or service that the other wants.
C)an inefficient allocation of scarce resources.
D)the creation of money through monetary policy.

Question

Diana tutors Tiago for two hours before his economics final exam.Tiago pays Diana through a direct transfer from his bank on a payment app.Diana then uses her debit card to buy pizza for dinner from the local pizza parlor.This is an example of
A)​the exchange of money facilitating production and trade.
B)trade between two people who each have a good or service that the other wants.
C)​an inefficient allocation of scarce resources.
D)​the creation of money through monetary policy.

Quizplus · Accepted Answer

This is an example of the exchange of money facilitating production and trade. Diana provided a service (tutoring) to Tiago in exchange for payment, which Tiago made through a direct bank transfer. Diana then used that payment to buy pizza, stimulating local production and trade.

Diana Tutors Tiago for Two Hours Before His Economics Final