• Card 22 / 100: How does indirect exchange facilitate the strategy of "one step back, two steps forward"?

    Answer:
    With the possibility of indirect exchange, an individual can "sell" her wares and receive something she doesn't directly desire, and in this sense has taken a step back in the goals she can satisfy with her possessions. But if she can then trade away the medium of exchange to obtain something she likes even better than the original possession, she has taken two steps forward.

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Capitalism: The Market Economy

Access: Public Peer Review

Attribution:  Dr. Robert P. Murphy, Lessons for the Young Economist. (Mises Institute), http://mises.org/document/6215/Lessons-for-the-Young-Economist (Accessed 04 April, 2014). License: Creative Commons BY
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