PRC-3 · Chapter 17 · Question 1 of 20
Before the invention of money, people used the barter system. However, for a barter trade to occur, person A must want exactly what person B has, and person B must want exactly what person A has. This massive hurdle is known as the:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Double coincidence of wants
Explanation
The double coincidence of wants is the primary flaw of the barter system, making trade extremely difficult without a universally accepted medium of exchange (money).
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