ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the relative value of bartered goods remains the same over time.
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the value of money fluctuates over time.
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the relative value of goods is difficult to establish in a barter system.
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the value of bartered goods decreases after they are purchased.
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Detailed explanation-1: -1) Money works as a store of value. 2) Any commodity cannot act as money. 3) Barter System had many difficulties. 4) Money is the basis of credit.
Detailed explanation-2: -Money As a Medium of Exchange Money enables anyone who possesses it to participate as an equal market player. When consumers use money to purchase an item or service, they are effectively making a bid in response to an asking price.
Detailed explanation-3: -Bartering makes it easier to negotiate but lacks the flexibility of a currency system. Many small businesses accept non-monetary payments for their services, and the IRS treats these bartered transactions the same as currency transactions for tax-reporting purposes.
Detailed explanation-4: -The problems associated with the barter system are inability to make deferred payments, lack of common measure value, difficulty in storage of goods, lack of double coincidence of wants.