AS A PAYMENTS SYSTEM EVOLVES FROM BARTER TO A MONETARY SYSTEM, PAP...

94) As a payments system evolves from barter to a monetary system, paper currency will replace

commodity money when

(a) trade expands over a larger region, increasing significantly the transportation costs of

commodity money.

(b) printing reaches a sufficiently advanced stage that counterfeiting becomes extremely difficult.

(c) large purchases, such as automobiles and houses, become more prevalent.

(d) all of the above occur.

(e) only (a) and (b) of the above occur.

Answer: D

Question Status: Previous Edition