NECO 2004 Economics · Question 22

The introduction of money into the economy has helped to resolve the following problems EXCEPT

Options

  1. A.accessibility of needs
  2. B.availability of goods
  3. C.coincidence of wants
  4. D.making deferred payments
  5. E.measure and store of value

Answer: B. availability of goods

Explanation written with AI and checked against the answer key

Analyze the question: We need the option that money did NOT help to solve. Money was introduced to overcome the problems of barter.

Concept: Problems of barter and how money solves them:

  • Double coincidence of wants: money acts as a medium of exchange, so you no longer need to find someone who wants what you have (C is solved).
  • Lack of a measure of value: money is a unit of account (E is solved).
  • Difficulty storing value: money is a store of value (E is solved).
  • Difficulty of deferred payments: money is a standard for deferred payments (D is solved).
  • Indivisibility of goods: money is divisible into small units.

Going through the options:

  • A. Accessibility of needs: with money, people can buy what they need, so access to needs is eased. Money helps here.
  • B. Availability of goods: money does not make goods available. Availability depends on production and supply (land, labour, capital, enterprise), not on the existence of money. Money only facilitates exchange of goods that already exist.
  • C. Coincidence of wants: solved by money as a medium of exchange.
  • D. Deferred payments: solved, since money is a standard for future payments.
  • E. Measure and store of value: solved, as these are core functions of money.

Answer: B. Availability of goods is the one problem money does not resolve, because it is determined by production, not by money.

Tip: In "EXCEPT" questions on money, match each option to a function of money (medium of exchange, unit of account, store of value, standard of deferred payment). The option that is about production or supply rather than exchange is usually the odd one out.

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