Consider the Following: There Are Two Countries, a and

Consider the following: there are two countries, A and
B.Each country has the same resources, and produces the same goods.The residents of country A use money; the residents of country B rely on bartering of goods.Will each country produce the same quantity of output? Explain.No, the residents of Country B will definitely spend more of their time transacting, trying to create a double coincidence of wants, and may have to rely on multiple trades to do so.They will also likely specialize less, reducing the gains to the country from specialization.In country A the residents will be able to transact immediately using money, and will also be able to specialize in what they do well creating a more efficient economy.