Use of money as a medium of exchange

A) represents the most important service that money renders.
B) permits only very limited production because of the high transaction costs of exchange.
C) means that transactions only occur if there is a double coincidence of wants.
D) permits only very limited specialization of labor.

Medium of Exchange

A medium of exchange is a system or object that is widely accepted as payment for goods and services.

Transaction Costs

The expenses incurred when buying or selling goods or services, including costs of gathering information, negotiating, and enforcing contracts.

Double Coincidence of Wants

A condition for trade in a barter system where two parties each desire what the other has to offer.