Question

What type of system have you used in this transaction?

1) A barter system because each person gets something of value.
2) A mixed system because he can give his mom the roast beef you made but you can't sell your clean drain line.
3) A monetary system because you are exchanging goods and services.
4) An equal exchange system because both offers have the exact same value.

Answer 1

The transaction uses a monetary system, which allows for easy exchange of goods and services, unlike the barter system that has limitations such as needing a double coincidence of wants.

Step-by-step explanation:

The type of system used in the transaction described would be a monetary system since it involves exchanging goods and services through a medium that is widely accepted as a method of payment. The description establishes that money acts as an intermediary between the buyer and seller, allowing for ease of trading and solving the limitations associated with the barter system, such as the difficulty of matching wants or the inability to make future contracts for perishable goods. Precious metals and other objects of value served as currency in early economies before the adoption of minted coins, reflecting the transition to a monetary economy. This monetary system is crucial in modern advanced economies, facilitating a complex division of labor with innumerable jobs and goods.