The direct exchange of one good for another

Question

Quizplus · Accepted Answer

The direct exchange of one good for another is known as barter. While it can be used, it is not the most efficient method for an economy as it requires a coincidence of wants between individuals. Market exchanges, where goods are exchanged for money, are more commonly used. However, bartering can facilitate specialization in production as individuals can trade goods they produce most efficiently for goods they cannot produce as efficiently.

The Direct Exchange of One Good for Another