3 Importance of Money and Double Coincidenceof Wants:Without money, a trade would require barterwhich refers to thethe exchange of one good or service for ar +. Every transaction under a barter exchangewould require a double coincidence of wantswhich refers to the likelyoccurrencethat two people each have a good the otherwants. For example, if I have 1 KG of wheat andwant to exchange it for 1KG of apples, I will haveto find someone who has Apples + andwilling to exchange 1KG for at the most 1KG ofapple + . Most people wouldhave to spend time searching for others towhich is a huge waste of resources.This searching is unnecessary + withmoney which refers to the set of assets in aneconomy that people regularly + use tobuy goods and services from other people.

The term double exchange of wants means the situation where both the parties to trade agree to trade…

Answered: This searching is unnecessary with…

This searching is unnecessary with money which refers to the set of assets in an economy that people regularly + Juse to buy goods and services from other people.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Frontiers Of Microeconomics

Section: Chapter Questions

Problem 6PA

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Question

Importance of Money and Double Coincidence
of Wants:
Without money, a trade would require barter
which refers to the
the exchange of one good or service for ar +
. Every transaction under a barter exchange
would require a double coincidence of wants
which refers to the likely
occurrence
that two people each have a good the other
wants. For example, if I have 1 KG of wheat and
want to exchange it for 1KG of apples, I will have
to find someone who has Apples + and
willing to exchange 1KG for at the most 1KG of
apple + . Most people would
have to spend time searching for others to
which is a huge waste of resources.
This searching is unnecessary + with
money which refers to the set of assets in an
economy that people regularly + use to
buy goods and services from other people.

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