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In a ________ economy there are more prices than in a ________ economy. A) barter; money B) fiat; barter C) money; barter D) fiat; money

User Thanga
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Final answer:

The correct answer is C) money; barter, because in a money economy, every good and service has a price, whereas in a barter economy, prices are not used, and goods are directly exchanged.

Step-by-step explanation:

In a barter economy, the system of trade is based on the direct exchange of goods and services without the use of money. This often requires the 'double coincidence of wants,' which can be very inefficient. To overcome such inefficiencies, societies developed the concept of money as a means of exchange with universal value.

A fiat money economy, on the other hand, uses a currency that is declared legal tender by a government but has no intrinsic value. The value of fiat money is derived from the trust and faith of the people who use it. Historically, as economies evolved and grew more complex, many transitioned from using commodity money, such as precious metals, to fiat money due to the practicalities in facilitating trade.

Therefore, the correct answer to the given question is: In a money economy there are more prices than in a barter economy. Hence, the right choice is C) money; barter.

User Karla
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