1. Functions of money and barter Consider an economy in which money does not exist, so that agents rely on barter to carry out transactions. When the ec seemed sufficient. However, the economy has now begun to grow. If people in this economy trade two goods, the price tag of each good must list prices for people to carry out transactions. prices, and the economy reo Suppose that the number of goods people trade increases to 18. Then the price tag of each good must list prices that the economy requires increases to No suppose that our economy has a money. The government now issues a national currency and there is no longer any In this economy, money and currency because: The fact that the government issues currency means that the currency will be accepted as money by all agents. The act that the currency is backed by the government means that it will never lose value and will remain a perfect unit of account. Just because the government issues currency does not mean that the currency will be accepted as money, and buyers and sellers still need barter to ensure that money does not lose its value. Just because the government issues currency does not mean that the currency will be accepted will be accepted as money, since it must used as a medium of exchange, store of value and standard of value. Suppose now that our economy is suffering from rapid, ongoing increases in the cost of living. Which characteristic of money is directly negatively impacted in that economy? double coincidence of wants, store of value, unit of account, medium of exchange ​