Question

Which of the following are true of a barter economy? Check all that apply. (A) Money evolved out of a barter economy as traders sought to make trading easier.(B) The transaction costs of exchanges are lower in a barter economy than in a money economy.(C) Average living standards can be expected to be lower in a barter economy than in a money economy.

Answer 1

The correct answers are A) Money evolved out of a barter economy as traders sought to make trading easier and C) Average living standards can be expected to be lower in a barter economy than in a money economy.

The statements that are true of a barter economy are the following: Money evolved out of a barter economy as traders sought to make trading easier and average living standards can be expected to be lower in a barter economy than in a money economy.

In a barter economy, products and services are traded or exchanged for other things with the same value. Barter does not include cash. Many ancient civilizations used bartering for the exchange of their products. But to make trade easier, ancient civilizations like the Phoenicians invented the first kind of money to facilitate the establishment of value for goods.