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Unformatted text preview: Place Supermarket The Mall Service NYSE eBay 2 Barterconsiderations Barter requires a double coincidence of wants each party to the exchange must want what the other has to trade. Transactions costs the costs of making an exchangeare high in barter exchanges. Money reduces the transactions costs because it does not require a double coincidence of wants. In barter, the price of one good in terms of the other is called the relative price . It is the rate of exchange between the two goods. Bartering Boom The Internet has reduced the transaction costs of bartering. Web sites like BigVine help individuals and small businesses barter online. Sites offer a diverse range of products and services from accounting to car repair, and restaurant meals to advertising space....
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- Spring '10
- Money Markets