Which is an example of how a denomination is divisible?
a. an american dollar may equal one-half of one euro.
b. an american dollar is equal to four quarters.
c..three american dollars may buy a small snack.
d. five american dollars may be worth less next year.

The correct answer is B. An example of how a denomination is divisible is that an American Dollar is equal to four quarters.

Explanation:

The divisibility of money implies the possibility of separating its value into parts, to adapt its use to smaller transactions. In the case of the example, a dollar can be divided into 4 quarters, with which people can perform low-value operations.

Divisibility is a very desirable attribution in a medium of exchange, since when a monetary unit has a very high value, and it is not divisible, it is inoperable for carrying out small transactions. What it means, if cash is not easily divisible, frictions, limitations or difficulties arise to efficiently carry out transactions. Frictions reduce the effectiveness of certain economic measures, destabilize the price system, distort consumer decisions and intensify the vulnerability of the economy.