Final answer:
In a barter economy, goods and services are directly exchanged for other goods and services without using money, which can be inefficient due to the need for a double coincidence of wants. The correct answer is b. goods and services are exchanged for other goods and services.
Step-by-step explanation:
A barter economy is one where goods and services are directly exchanged for other goods and services without the use of a common medium of exchange, such as money. This system relies on the double coincidence of wants, which means that both parties involved in the exchange need to have what the other wants, at the same time.
Due to this requirement, bartering can be highly inefficient, particularly in complex modern economies with a wide division of labor and numerous goods and services. Money, on the other hand, serves as a medium of exchange, facilitating transactions without the double coincidence of wants and allowing for easier future contracts and economic growth.
The correct answer to the student's question - A barter economy is an economy where b. goods and services are exchanged for other goods and services.