In a barter system, a shoe-maker who wants wheat must find a farmer who has wheat and also wants shoes. What is this need called?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Double coincidence of wants
In barter, goods are exchanged directly for goods, so each person must want what the other has to sell: a double coincidence of wants. Money removes this need by acting as a medium of exchange.