Barter

What is a barter system in economics? 

• An exchange system using standardized currency.

• A system where goods and services are directly exchanged without money.

• A digital payment system for online transactions.

• A complex economic theory. 

In a barter system, what is the "double coincidence of wants"? 

• A requirement to have two forms of currency.

• The need for two parties to have matching desires for each other's goods or services.

• A requirement for two intermediaries in a trade.

• The need for two separate transactions to complete a trade. 

Which of the following is a limitation of barter systems? 

• Lack of divisibility of goods

• Uniformity in the value of exchanged goods.

• Efficient allocation of resources.

• Reduced complexity in trading.

What is the concept of demand in economics?

• The desire to purchase goods and services.

• The availability of a product in the market.

• The cost of a product or service.

• The production of goods and services.

What is a major disadvantage of a barter system?

• It allows for easy calculation of exchange rates.

• It requires a coincidence of wants.

• It simplifies transactions.

• It promotes economic growth.

Why is barter system considered inefficient?

• Because it requires double coincidence of wants.

• Because it promotes economic growth.

• Because it simplifies transactions.

• Because it allows for easy calculation of exchange rates.

What is the role of money in a modern economy compared to a barter system?

• Money serves as a medium of exchange, a unit of account, and a store of value.

• Money is used to accumulate wealth, while barter is used for immediate needs.

• Money is used for international trade, while barter is used for local trade.

• Money has no role in a modern economy, it is only used in a barter system.

Why is the use of money preferable to barter systems in modern economies? 

• Money is scarce and difficult to obtain.

• Barter systems offer more flexibility.

• Money simplifies trade by providing a common medium of exchange.

• Barter systems provide a consistent measure of value. 

What does the division of labour mean in a barter system? 

• Separation of goods and services.

• Specialization in a specific trade.

• Using multiple forms of currency.

• Equal distribution of resources. 

In a barter system, what is the primary challenge when there is a lack of a double coincidence of wants? 

• The need to involve multiple intermediaries.

• The risk of counterfeiting.

• Difficulty in determining the value of goods.

• Difficulty in finding suitable trading partners.