In a highly developed economy characterized by a complex division of labour, money’s function as a medium of exchange is fundamental because it...
provides a common standard to compare the relative prices of highly specialised goods and services.
guarantees that the purchasing power of specialised producers is preserved over long periods of deferred payment.
obviates the requirement for a double coincidence of wants, enabling individuals to trade their specialised output efficiently.
directly increases the productive capacity of the economy, shifting the production possibility frontier outwards.
