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Evolution of Money and Exchange Systems Quiz

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Evolution of Money and Exchange Systems Quiz

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Questions and Answers

What is one of the obstacles in the barter system mentioned in the text?

Determining an agreed rate of exchange

Storing wealth in the form of perishable goods

Finding appropriate exchange partners

Dividing indivisible goods for exchange (correct)

Why is finding an agreed 'rate of exchange' challenging in a barter system?

It involves convincing someone to exchange perishable goods

It must be acceptable for everyone simultaneously (correct)

The value of goods is impossible to measure in terms of different goods

Most goods are indivisible and cannot be evenly exchanged

Why is storing wealth in the form of perishable goods impossible in a barter system?

Perishable goods cannot be stored for long-term wealth accumulation (correct)

Finding appropriate exchange partners is time-consuming

Most goods are indivisible and cannot be evenly exchanged

It is difficult to measure the value of goods in terms of different goods

What is an example of an indivisible good mentioned in the text?

Chair Signup and view all the answers

Why was the transfer of wealth a serious issue in the absence of money in the barter system?

Most goods are immoveable and cannot be easily exchanged Signup and view all the answers

What is the main disadvantage of the barter system?

The need for 'coincidence of wants' Signup and view all the answers

What was the main reason for the shift from the barter system to an alternate system of exchange?

Inconvenience in direct exchange Signup and view all the answers

Which characteristic of the barter system is still observed in typical rural areas of underdeveloped countries?

Coincidence of wants Signup and view all the answers

What is the fundamental condition for the barter system to take place?

'Coincidence of wants' Signup and view all the answers

What is the purpose of an alternate system for exchange of goods and services?

To overcome the inconvenience of barter system Signup and view all the answers