Question

Finding a person who has the goods that we need and needs the goods we have was a drawback of the barter system.

What is this referred to as?

• A. Medium of exchange
• B. Measure of value
• C. Double coincidence of wants
• D. Not acceptable universally

Answer 1

The correct option is C Double coincidence of wants

The barter system involves finding a person who has the goods that we need and needs the goods we have. This drawback is referred to as the double coincidence of wants.

To overcome this situation, an intermediatory was introduced. This intermediatory was called money. Hence, money acts as the medium of exchange.