10 Questions
What is one of the obstacles in the barter system mentioned in the text?
Dividing indivisible goods for exchange
Why is finding an agreed 'rate of exchange' challenging in a barter system?
It must be acceptable for everyone simultaneously
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
What is an example of an indivisible good mentioned in the text?
Chair
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
What is the main disadvantage of the barter system?
The need for 'coincidence of wants'
What was the main reason for the shift from the barter system to an alternate system of exchange?
Inconvenience in direct exchange
Which characteristic of the barter system is still observed in typical rural areas of underdeveloped countries?
Coincidence of wants
What is the fundamental condition for the barter system to take place?
'Coincidence of wants'
What is the purpose of an alternate system for exchange of goods and services?
To overcome the inconvenience of barter system
Test your knowledge on the evolution of money and exchange systems with this quiz. Explore the transition from the barter system to the development of a medium of exchange and alternate systems.
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