Practicing Success
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| Which of the following statement/statements are true? Statement 1: Economic exchanges without the mediation of money are known as barter exchanges. Statement 2: Barter exchanges presume the double coincidence of wants. |
Both the statements are true Both the statements are false Statement 1 is true and Statement 2 is false Statement 2 is true and Statement 1 is false |
| Both the statements are true |
| 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. She needs to find another person who has the diametrically opposite demand for rice with a surplus of clothing to offer in exchange. |
