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JAMB Economics 1985 Question 30

Question 30

Money and Inflation

Which of the following is a necessary prerequisite for trade by barter?

  1. A.Need for double coincidence of wants
  2. B.Multiple exchange rate
  3. C.Impossibility of future trade
  4. D.Impossibility of large-scale production
  5. E.Indivisibility of commodities.
Show the answer and explanation

Answer: A (Need for double coincidence of wants)

Explanation

In barter each party must want what the other has; without this double coincidence of wants no exchange happens.