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Why does the chapter describe a barter system as suffering from the 'double coincidence of wants'?
ABoth parties must agree on the price simultaneously
BEach party in the trade must want exactly what the other has to offer
CTwo governments must agree on currency
DTwo banks must be willing to clear a transaction
Answer & Solution
Correct answer: B. Each party in the trade must want exactly what the other has to offer
Double coincidence of wants: A has X and wants Y, AND B has Y and wants X. Such pairings are rare; money eliminates this search problem by being universally acceptable.
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