Final answer:
Money reduces transaction costs, allowing people to specialize in what they do best.
Step-by-step explanation:
Money reduces transaction costs, allowing people to specialize in what they do best. When money is used as a medium of exchange, it eliminates the need for bartering, where individuals have to find someone with the exact goods or services they want and are willing to trade. For example, if a farmer wants to buy a tractor, they can simply use money to purchase it, rather than having to find a tractor owner who needs their specific agricultural products. This specialization and division of labor made possible by money helps to increase productivity and economic efficiency.