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Unformatted text preview: of barter is inefficient
because a coincidence of wants must exist in order to
conduct a trade. Stated otherwise, two persons each
having what the other wants must encounter one
another simultaneously for barter to occur and the
sheer probability of this occurring is unlikely. 15 Our nation was once a barter economy and the
location of trade centers in areas with access to
waterway transportation serves as evidence of how
barter trade centers evolved. Money was eventually
introduced and the use of barter in our nation fell by
the wayside. Interestingly, cities located along
waterways have continued to persist. One reason for
this persistence is due to the fact that waterways
continued to represent an efficient way of transporting
resources and as such many of our early trade centers
evolved into production centers. 7 Chapter 2: The Market System and The Circular Flow
16 The final critical component of a market system we
examine is the existence of an active, but limited,
government. Active, but Limi...
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This note was uploaded on 09/10/2009 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.
- Spring '09