Question

Which is the best definition of voluntary exchange?

Question options:

banks voluntarily provide a reasonable exchange rate for foreign currencies


citizens voluntarily give up rights to the government for protection


the government provides laborers with money in exchange for their hard work


citizens choose to trade goods or services for something else of value

Answer 1

citizens choose to trade goods or services for something else of value

Voluntary exchange refers to actions of buyers and sellers freely and willingly engaging in market transactions. It involves transacting in such a way that both the buyer and the seller are better off after the exchange than before it.