A double coincidence of wants refers to

A. the situation where two parties are involved in a transaction where money is the medium of exchange.

B. the idea that a barter economy is more efficient than an economy that uses money.

C. the fact that for a barter trade to take place between two people, each person must want what the other one has.

D. the situation in which a good that is used as money also has value independent of its use as money.

Question

Business

Riddle

2 January, 20:52

A double coincidence of wants refers to

A. the situation where two parties are involved in a transaction where money is the medium of exchange.

B. the idea that a barter economy is more efficient than an economy that uses money.

C. the fact that for a barter trade to take place between two people, each person must want what the other one has.

D. the situation in which a good that is used as money also has value independent of its use as money.

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Answers (1)

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George Vaughn · Answer 1

C. the fact that for a barter trade to take place between two people, each person must want what the other one has

Explanation:

The double coincidence of wants is the foundation of barter trade and bartering economy. In order to avoid the usage of money as an exchange medium, both parties engaged in a barter must what the other one has.

If there is a discrepancy present, then a monetary medium has to be used in the exchange of goods or services.