A rural economy is transitioning from self-sufficient household production to a system based on a strict division of labour. Which of the following best describes how the introduction of money, rather than a reliance on a barter system, facilitates this transition?
It eliminates the necessity of a double coincidence of wants, lowering transaction costs and enabling specialised producers to easily exchange their surplus.
It acts as a reliable store of value, which guarantees that the real purchasing power of the specialised producers' savings is completely insulated from inflation.
It functions as a unit of account, which directly prevents the onset of diminishing marginal returns in the newly specialised production processes.
It acts as a medium of exchange, decreasing the volume of trade required by encouraging households to become increasingly self-sufficient.
