A mother needed someone to babysit her child but had no money. She made a deal with another person who needed help to move things from an old house to a new house. They agreed to help each other. Which kind of exchange is this?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Barter exchange
The two people swap services for services. No money is used, so it is a barter exchange. Here both want what the other offers: a double coincidence of wants.
NCERT (2026-27): “Economic exchanges without the mediation of money are referred to as barter exchanges. However, they presume the rather improbable double coincidence of wants. Consider, for example, an individual who has a surplus of rice which she wishes to exchange for clothing. If she is not lucky enough she may not be able to find another person who has the diametrically opposite demand for rice with a surplus of clothing to offer in exchange. The search costs may become prohibitive as the number of individuals increases.” |