Understanding the Barter System

What is the barter system?

• A method of growing food

• A system of exchanging goods without money

• A process of saving money

• A modern digital transaction system

Which of the following is an example of barter?

• Buying milk with cash

• Using UPI to pay for groceries

• Exchanging an eraser for a pencil

• Swiping a debit card for shoes

Which was not a commodity used in the early barter system?

• Cowrie shells

• Salt

• Cloth

• Mobile phones

What is the meaning of 'double coincidence of wants'?

• When two people want exactly what the other has

• When money is used by two people at once

• When someone wants two things together

• When two goods are coincidentally the same price

Which of these is a problem in the barter system?

• Too much money circulation

• Difficulty in storing goods

• Easy comparison of prices

• Lack of digital access

Which of the following is a limitation of the barter system?

• Easy transportation

• Lack of a common standard of value

• Universal acceptability

• Immediate payment methods

Which of the following is the meaning of 'divisibility' in trade?

• Money can be used to divide services

• The ability to carry goods

• The capacity to split an object into parts

• The rule of equal transaction

What does 'portability' refer to in the context of money?

• Durability of the goods

• Ability to carry an item from one place to another

• Value of a product

• Buying portable gadgets

Why is money considered a store of value?

• It can only be used in physical form

• It can be saved and used for future purchases

• It is available only in coins

• It is used for measuring height and weight

What role does money play in deferred payments?

• It allows people to avoid paying

• It enables buying now and paying later

• It replaces bank loans

• It stops future purchases