Exchange Forms of Exchange Barter Barter this is a direct trade one good for another good Bartering normally contains more than two actors in the final trade Example Trading a lunch Money Money any item that is readily accepted by people in return for goods and services ID: 1027307
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1. Definition- Where producers and consumers agree to provide one type of item in return for anotherExchange
2. Forms of Exchange- BarterBarter- this is a direct trade; one good for another good Bartering normally contains more than two actors in the final tradeExample: Trading a lunch
3. MoneyMoney- any item that is readily accepted by people in return for goods and servicesThe problems with bartering lead to the development of money to simply transition each trade for all parties3 functions of Money1 A standardized item that is generally traded for goods or services2 A measure of value that allows both producers and consumers to determine and express worth3 a store of value that can be saved and used to purchase items at a later date
4. CreditCredit- allows consumers to use items before completing payment for the merchandiseCredit- allows consumers to pay for an item over a specified period of timeConsumers who fail to make the necessary credit payments may be required to return the merchandise for which they are paying They may also pay extra on top of the purchased amount (credit cards)They also risk losing future opportunities to receive credit
5. Specialization and TradeTrade
6. Value