Question

13. SOURCE BASED QUESTION

In barter system, where goods are directly exchanged without the use of money, double

coincidence of wants (i.e. a person desires to sell exactly what the other person wishes to

buy) is an essential feature. But it, indeed, is a very cumbersome process. By serving as a

medium of exchange, money removes the situation of double coincidence of wants and the

difficulties associated with the barter system. For example, it is no longer necessary for a

shoe manufacturer to look for a who will buy his and at the same time sell him wheat. All

he has to do is to find a buyer for his , who will exchange his money for . Now, he can

purchase wheat or any other good in the market with the help of the money earned. Thus,

the problem of double coincidence of wants is solved with the use of money.

a. What is barter system?(1m)

b. __________ removes the situation of double coincidence of wants. (1m)

c. Give an example of barter mentioned in the paragraph (1m)

d. What is double coincidence of wants? (1m)​

Answer 1

Explanation:

Your required answer is here.....

a. Barter system is the system in which goods are exchanged without use of money.

b.Money removes the situation of double coincidence of wants.

c.A shoe maker exchanged his shoes with another Person who wants to sell his wheat.

d.Double coincidence of wants is the situation where a person want to sell the same thing that other person want to buy.

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