Chapter 11: From Barter to Money — Online MCQ Test
SOCIAL · Grade 7 · CBSE(NCERT)
Practice Chapter 11: From Barter to Money with a free chapter-wise online MCQ test.
This chapter covers: Barter system Double coincidence of wants Money Coins Currency Banknotes Digital payments Trade Exchange Medium of exchange.
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Chapter 11: From Barter to Money — Important Questions & Answers
What is the barter system?
- A. Direct exchange of goods without using money
- B. Trading only precious metals
- C. Buying goods on credit
- D. Selling goods to the government
Answer: A. Direct exchange of goods without using money
The barter system is the direct exchange of one good for another without the use of money as a medium.
The barter system is the direct exchange of one good for another without the use of money as a medium.
What is meant by 'double coincidence of wants'?
- A. When two people want to trade at the same time
- B. When both parties have exactly what the other person wants
- C. When goods are exchanged twice
- D. When money is used in exchange
Answer: B. When both parties have exactly what the other person wants
Double coincidence of wants occurs when both parties in a barter transaction have exactly what the other wants, which is a major limitation of barter.
Double coincidence of wants occurs when both parties in a barter transaction have exactly what the other wants, which is a major limitation of barter.
What is a primary advantage of using money over barter?
- A. It eliminates the need for trade entirely
- B. It solves the problem of double coincidence of wants
- C. It makes all goods equal in value
- D. It reduces the number of traders
Answer: B. It solves the problem of double coincidence of wants
Money eliminates the need for double coincidence of wants by serving as a universally accepted medium of exchange.
Money eliminates the need for double coincidence of wants by serving as a universally accepted medium of exchange.
Which of the following is a limitation of the barter system?
- A. Money is not involved
- B. Goods cannot be exchanged
- C. Difficulty in determining fair exchange rates for different goods
- D. Everyone always has what others want
Answer: C. Difficulty in determining fair exchange rates for different goods
In barter, it is difficult to establish fair value exchange rates between different types of goods, leading to disputes.
In barter, it is difficult to establish fair value exchange rates between different types of goods, leading to disputes.
Which of the following transactions would face the LEAST problem in a barter system compared to a money system?
- A. A teacher exchanging teaching services for food
- B. A student buying 5 textbooks with exact goods
- C. A person exchanging identical items of equal value
- D. Conducting international trade
Answer: C. A person exchanging identical items of equal value
In barter, exchanging items of obviously equal value (like swapping two identical goods) is straightforward, but most real transactions involve different goods.
In barter, exchanging items of obviously equal value (like swapping two identical goods) is straightforward, but most real transactions involve different goods.