Asked by David Williams on Jun 23, 2024
Verified
The use of money contributes to economic efficiency because
A) governmental direction of the production and distribution of output can be avoided by using money.
B) roundabout production could not occur without the availability of money.
C) it is necessary for the creation of capital goods.
D) it promotes specialization by overcoming the problems with barter.
Economic Efficiency
The optimal distribution of resources in a manner that maximizes the total utility to all individuals in the economy.
Governmental Direction
Guidance or regulation provided by government bodies to influence or control certain activities, industries, or economic policies.
Roundabout Production
An economic concept that refers to more capital-intensive and indirect methods of production, which, although initially more time-consuming and costly, lead to greater efficiencies and outputs in the long run.
- Recognize the mechanisms by which money facilitates specialization and economic efficiency.
Verified Answer
QN
Queen NatalieJun 26, 2024
Final Answer :
D
Explanation :
Money facilitates trade by eliminating the inefficiencies of a barter system, such as the need for a double coincidence of wants, thereby promoting specialization and economic efficiency.
Learning Objectives
- Recognize the mechanisms by which money facilitates specialization and economic efficiency.