Examkin

Question

Difficulty: EasyFunctions and Characteristics of Money

Match each essential characteristic of money on the left with the specific limitation of the barter economy it directly addresses on the right.

  • DivisibilityInability to conduct small-value transactions without ruining the value of indivisible goods
  • DurabilityPhysical decay or wastage of commodities used during storage over time
  • PortabilityDifficulty and inconvenience of carrying heavy or bulky goods to marketplace locations
  • HomogeneityVariation in quality and standard among trade items of the same category

Answer

Divisibility matches with the inability to conduct small-value transactions; Durability matches with physical decay of commodities; Portability matches with the difficulty of carrying heavy goods; Homogeneity matches with variation in quality among trade items.
Each property of money directly counteracts a key weakness of the barter system: divisibility enables small transactions without destroying value, durability prevents physical deterioration over time, portability eliminates transport difficulty for heavy commodities, and homogeneity ensures standardization across identical monetary units.

Step-by-Step Solution

1
Analyze each characteristic of money and its fundamental economic purpose.
Identify how Divisibility, Durability, Portability, and Homogeneity function in trade.
Understanding the physical properties of money clarifies which barter defect each property eliminates.
2
Pair each characteristic to its corresponding barter limitation.
Divisibility resolves indivisibility of goods; Durability resolves perishability; Portability resolves bulkiness; Homogeneity resolves non-uniformity.
Each characteristic directly neutralizes a specific inefficiency of direct commodity exchange.

Key Concept

Characteristics of Money and Solutions to Barter Problems
Estimated Time:1m 0s
Rate this question

Topics

Functions and Characteristics of Money

More questions from this topic