Exchange of commodities without the mediation of money is called as?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Barter Exchange.
Before money, people traded goods directly for other goods, rice for cloth, for instance. Such exchange without the mediation of money is called barter exchange. It works only when each party wants just what the other offers, a double coincidence of wants, which is hard to find in a large economy; money removes the difficulty by acting as a medium of exchange.
Why the other options are incorrect
Option (1) Nominal Exchange. — Incorrect. ‘Nominal’ refers to values measured in money at current prices. An exchange measured in money cannot be one without money.
Option (2) Real Exchange. — Incorrect. ‘Real’ values are money values corrected for changes in prices. The term is about measuring value, not about trading without money.
Option (4) Gold Exchange. — Incorrect. Gold has long served as money itself. Paying in gold is exchange through a form of money, not without it.
Note: A same/similar question was asked in CUET (UG) in the papers below.
| 2026 | 2025 | 2024 | 2023 | 2022 |
| 13-05 S2 | 22-05 S1* | – | – | – |
* A similar question.
NCERT (2025-26): “Money and Banking … 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.…” |