Question

In order for money to be successfully used as a medium of exchange, it must 1) be readily acceptable; 2) be easily divisible; 3) have a high value-weight ratio.

A) 1 only
B) 2 only
C) 3 only
D) 1 and 2
E) 1, 2, and 3

Answer 1

Money must be readily acceptable, easily divisible, and have a high value-weight ratio to be used effectively as a medium of exchange. The correct answer to the question is E) 1, 2, and 3, as all these characteristics are essential for money to serve its purpose.

Step-by-step explanation:

In order for money to be successfully used as a medium of exchange, several key attributes are required. Firstly, it must be readily acceptable by a wide range of parties as a method of payment. Secondly, money should be easily divisible so that it can facilitate transactions of various sizes. Lastly, having a high value-weight ratio is beneficial for money to be convenient to transport and exchange in large amounts. Therefore, the correct answer to the question is E) 1, 2, and 3. This reflects the necessity of all three characteristics for money to function effectively in its role.