True or False?
If information were costless and therefore everyone knew everything about everyone else, all transactors would know that other transactors will honor their debts and spend no more than their income---anyone who lied or misrepresented facts would not be able to find people to transact with. A credit and clearing system could under these circumstances perform the functions that are normally performed by money. All debts would be settled (or extended, if that is what the parties want) at the end of every period. A unit of account would be necessary, and everyone would have to keep records, but no one would need to carry cash. In fact, in a world where information is costless, maintaining records would presumably also be costless.