Asked by Kitty Dollas on Apr 26, 2024
Verified
Which of the following is most critical for the maintenance of an efficient and productive economy?
A) Money backed by gold or silver
B) Steadily rising prices
C) An unlimited and unregulated supply of money
D) A properly functioning monetary system
E) A well-organized barter system
Monetary System
The set of institutions and mechanisms by which a country manages its currency and money supply, often involving a central bank and various types of money.
Efficient Economy
An economic system in which resources are allocated in the most productive way, maximizing the output of goods and services.
- Gain insight into the purposes and qualities of money, encompassing its employment as a value unit, exchange instrument, and wealth conservation means.
Verified Answer
TL
Tiyona LashayApr 28, 2024
Final Answer :
D
Explanation :
A properly functioning monetary system is critical for maintaining an efficient and productive economy as it ensures stable prices, facilitates transactions, and allows for the efficient allocation of resources. Money backed by gold or silver is no longer used in most economies, and an unlimited and unregulated supply of money can lead to hyperinflation and economic instability. Steadily rising prices can also lead to economic instability and erode the purchasing power of individuals. A well-organized barter system may work for small-scale exchanges, but it is not practical for large-scale transactions in modern economies.
Learning Objectives
- Gain insight into the purposes and qualities of money, encompassing its employment as a value unit, exchange instrument, and wealth conservation means.