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Question
Saran has a bag of rice and Aman has a bottle of milk. Saran wants milk and Aman wants rice. They interchange their goods. This system is known as __________.
Saran has a bag of rice and Aman has a bottle of milk. Saran wants milk and Aman wants rice. They interchange their goods. This system is known as __________.
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Solution
The correct option is A barter system
In a barter system, goods are directly exchanged without the use of money. For a successful barter to happen, a double coincidence of wants is essential. Here, Saran has a bag of rice and wants exactly what Aman is willing to exchange, paving the way to barter goods.
In a barter system, goods are directly exchanged without the use of money. For a successful barter to happen, a double coincidence of wants is essential. Here, Saran has a bag of rice and wants exactly what Aman is willing to exchange, paving the way to barter goods.
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