the economics of money, banking, and financial markets

68 #

© 2014 Pearson Canada Inc.#

17. 
    

    A problem with barter exchange when there are many goods is that in a barter system
    ____.
    A) transactions costs are minimized
    B) there exists a multiple number of prices for each good
    C) there is only one store of value
    D) exchange of services is impossible
    Answer: B
    Diff: 1 Type: MC Page Ref: 49
    Skill: Applied
    Objective List: 3.2 Distinguish among the three primary functions of money

    
    


18. 
    

    In a barter economy the number of prices in an economy with N goods is ____.
    A) [N(N - 1)]/2
    B) N(N/2)
    C) 2N
    D) N(N/2) - 1
    Answer: A
    Diff: 3 Type: MC Page Ref: 49
    Skill: Recall
    Objective List: 3.2 Distinguish among the three primary functions of money

    
    


19. 
    

    If there are five goods in a barter economy, one needs to know ten prices in order to
    exchange one good for another. If, however, there are ten goods in a barter economy, then one
    needs to know ____ prices in order to exchange one good for another.
    A) 20
    B) 25
    C) 30
    D) 45
    Answer: D
    Diff: 2 Type: MC Page Ref: 49
    Skill: Applied
    Objective List: 3.2 Distinguish among the three primary functions of money

    
    


20. 
    

    If there are four goods in a barter economy, then one needs to know ____ prices in order
    to exchange one good for another.
    A) 8
    B) 6
    C) 5
    D) 4
    Answer: B
    Diff: 2 Type: MC Page Ref: 49
    Skill: Applied
    Objective List: 3.2 Distinguish among the three primary functions of money