Why should good money be divisible?
Correct answer
Answer B: For both small and large payments with the same form of money.
Quick explanation
This property is called divisibility. It lets you pay for small purchases without needing a different form of money.
Detailed explanation
A form of money must represent very different prices: a bread roll, a month's rent or a machine. It must therefore be divisible into sufficiently small units without losing its properties. Cents do this for the euro. Digital systems can use even smaller accounting units.
Divisibility supports both the unit-of-account function and use as a medium of exchange. It allows precise prices, change and payments of different sizes. Crucially, dividing a unit does not automatically increase the total quantity. A pizza does not get bigger when cut into eight slices instead of four. Likewise, finer denominations do not by themselves increase a form of money's total economic value.
Insufficient divisibility can make small payments impractical. Extremely fine divisibility, however, is only useful if users and payment systems can handle the units clearly and reliably.
Example or everyday application
One euro can be divided into 100 cents. This lets a product cost 1.49 euros. Without smaller units, many prices could only be expressed roughly or through awkward barter arrangements.