NCERT Class 7 Social Science Chapter 11
From Barter to Money
This chapter traces the evolution of economic exchange from the ancient barter system to the modern use of money and digital transactions. It explains the problems with barter and how money solved them by serving as a medium of exchange, unit of account, and store of value. Students will understand the history of money and its role in modern economies.
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Key Terms
- Barter System
- An ancient system of exchange where goods and services are traded directly for other goods and services without using money.
- Medium of Exchange
- A function of money whereby it is accepted as payment for goods and services, eliminating the need for direct barter.
- Commodity Money
- Objects that have intrinsic value and are used as money, such as cattle, grains, shells, and metals used in ancient times.
- Currency
- The official money issued by a government or central bank, which is accepted as a medium of exchange within a country.
- Digital Payment
- Modern methods of transferring money electronically using internet banking, mobile apps, or payment cards, replacing the need for physical cash.
Frequently Asked Questions
What is the barter system and what are its problems?▾
The barter system involves exchanging goods directly for other goods. Its main problems are the need for double coincidence of wants (both parties must want what the other has), difficulty in storing value, and inability to divide goods for partial payment.
How did money solve the problems of barter?▾
Money solved barter problems by providing a common medium of exchange that everyone accepts, a standard unit for measuring value, a way to store value for future use, and enabling easy divisibility for making change.
What were the earliest forms of money?▾
The earliest forms of money were commodity money — objects with intrinsic value like cattle, grains, cowrie shells, and metals. Later, metallic coins were introduced, followed by paper money and eventually digital currency.
What is the role of the Reserve Bank of India?▾
The Reserve Bank of India (RBI) is India's central bank that controls the issue of currency, regulates the banking system, maintains price stability, and formulates monetary policy to ensure the country's financial stability.
What are digital payments and why are they useful?▾
Digital payments are electronic transactions using tools like UPI, credit cards, net banking, and mobile wallets. They are useful because they are fast, convenient, traceable, reduce the need for physical cash, and help in financial inclusion.
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