Question

1) What comprises ‘terms of credit’?
2) What is the meaning of ‘barter system’?

Answer 1

Answer:

1.

Ans: Interest rate, collateral and documentation requirement and mode of repayment together comprise terms of credit.

2.

Ans: Barter system refers to the system of exchange of goods and services. It is the system by which one commodity is exchanged for another without the use of money. Before money was introduced, people practised barter system.

Example: A farmer could buy a dhoti from a weaver or a pair of shoes from a cobbler in exchange of grains he produced.

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