1.Which of the following is a disadvantage of the barter system? A)exchange of services is impossible B) transactions costs are minimized C)there is only one store of value D) there exists a multiple number of prices for each good

2. Andrea borrows money from Paul to start her business, but instead uses the money to pay for a vacation. This is an example of the problem A)moral hazard B)costly state verification C)dishonest arrangement D)adverse selection

3. Which of the following best represents the evolution of the payments system? A)Barter, cheques, paper currency, coins made of precious metals, electronic funds transfers B)Barter, coins made of precious metals, cheques, paper currency electronic funds transfers C)Barter, coins made of precious metals, paper currency, cheques, electronic funds transfers D)Barter, cheques, paper currency, electronic funds transfers

4. A draw back to fiat money is that A)are easily stolen B) are not the most liquid assets C)must be backed by gold D) are hard to counterfeit