ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Bartering is the exchange of goods and services between two or more parties without the use of money. It is the oldest form of commerce. Individuals and companies barter goods and services between each other based on equivalent estimates of prices and goods.

Detailed explanation-2: -The barter system is characteristic of traditional economies. It marks the evolution of the market economy-historically, every country developed out of some form of the traditional economy. Contemporarily though, most traditional countries have transformed into mixed economies.

Detailed explanation-3: -A barter economy is a cashless economic system in which services and goods are traded at negotiated rates. Barter-based economies are one of the earliest, predating monetary systems and even recorded history.

Detailed explanation-4: -Definition. A traditional economy is a system that relies on customs, history, and time-honored believes. Tradition guides economic decisions such as production and distribution. Societies with traditional economies depend on agriculture, fishing, hunting, gathering, or some combination of them.

Detailed explanation-5: -In times of monetary crisis or collapse, a barter system is often established as a means to continue the trading of goods and services and to keep a country functioning. This may occur if physical money is simply not available, or if a country sees hyperinflation or a deflationary spiral.