Penny is an artist, and John is a carpenter. Penny agrees to paint a portrait of Johns family in exchange for a handmade table created by John. How do Penny and John pay for their goods in their transaction?

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Penny is an artist, and John is a carpenter. Penny agrees to paint a portrait of John’s family in exchange for a handmade table created by John. How do Penny and John pay for their goods in their transaction?

A	using a store of value
B	through credit
C	through bartering
D	with currency

Explanation:

Detailed explanation-1: -In a Barter system, only goods and services are exchanged without any involvement of money. Hence exchanging a cup of oil for a cup of pulses is an example of barter system where goods are exchanged . This is an example of Bartering.

Detailed explanation-2: -Definition: A producer is someone who creates and supplies goods or services. Producers combine labor and capital-called factor inputs-to create-that is, to output-something else. Business firms are the main examples of producers and are usually what economists have in mind when talking about producers.

Detailed explanation-3: -Representative Money Examples. The most familiar examples of representative money today are credit cards and checks.

Detailed explanation-4: -A market is said to have reached equilibrium price when the supply of goods matches demand. A market in equilibrium demonstrates three characteristics: the behavior of agents is consistent, there are no incentives for agents to change behavior, and a dynamic process governs equilibrium outcomes.

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