Identify the picture and select the correct from the following

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Barter system

Mutual Exchange system

Both 1 &2

None of these

answer is A.

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Detailed Solution

The above image is a description of the barter system.
A barter system is a system of mutual exchange where goods are exchanged for goods directly.
This gave rise to the problem of double coincidence of wants. For example, it is no longer necessary for a tiffin manufacturer to look for a farmer who will buy his goods and at the same time sell him apples. All he has to do is find a buyer for his goods who will exchange his money for sheep. Now, he can purchase an Apple or any other interest on the market with the help of money earned. Thus, we can say that money is only one factor in resolving the problem of the double coincidence of wants.

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