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An economy where every trade needs a double coincidence of wants is best described as one using:
AFiat money
BBank credit
CDemand deposits
DBarter trade
Answer & Solution
Correct answer: D. Barter trade
1. The double coincidence problem defines a specific system.
2. To understand the usefulness of money we consider a world without money.
3. That world is discussed under barter and the double coincidence of wants.
4. Money removes the need for that coincidence by acting as an intermediary.
5. So the described economy is a barter economy.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 13 'Money and Banking'_
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