Question

The use of money for transactions

Question 3 options:

	fosters self-sufficiency.
	makes specialization of labor more difficult.
	makes exchange easier and thus promotes the specialization of labor.
	enables humanity to satisfy all wants.
	increases the use of barter.

Answer 1

Question 3

Answer: Option 3: Makes exchange easier and thus promotes the specialisation of labour.

Explanation: as money is used as a common medium of exchange between all transaction so the exchange process becomes much easier. When exchange becomes easier then the person easily get the value of the goods and services, it produced and they will continue to produce the same goods and services as their output is easily exchanged in the market, Which results in division of labour and increases specialisation in the economy.

In contrary during the barter systems there was no medium of exchange (money) as a results the exchange of goods and services were not so easier because goods were directly exchanged with other goods. So barrier in exchange does not promote division of labour and specialisation.