As trade expanded during the early development of economics, which of the following new business practices emerged to facilitate commerce?

• A. The elimination of currency in favor of barter
• B. The abolition of private property
• C. The restriction of trade to local markets only
• D. The use of double-entry bookkeeping

Answer: (D)

Verified step by step guidance

1. Understand the historical context: As trade expanded during the early development of economics, merchants and businesses needed more efficient ways to keep track of their transactions and financial positions.
2. Recognize the limitations of previous methods: Simple record-keeping or single-entry bookkeeping was insufficient for managing complex trade activities involving multiple transactions, debts, and credits.
3. Identify the innovation: The use of double-entry bookkeeping emerged as a new business practice. This system records each transaction twice, once as a debit and once as a credit, ensuring accuracy and balance in financial records.
4. Analyze why other options are incorrect: Barter was not favored over currency as trade expanded; private property was not abolished; and trade was not restricted to local markets but rather expanded geographically.
5. Conclude that double-entry bookkeeping facilitated commerce by improving financial transparency and accountability, which was essential for the growth of trade and business.