From Barter to Money

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Section A: 30 Multiple Choice Questions (MCQs)

1. What is barter system?
a) Exchange of money for goods
b) Exchange of goods and services without money
c) Use of coins only
d) Use of paper currency
Answer: b) Exchange of goods and services without money

2. Which of the following was NOT used as commodity money?
a) Cowrie shells
b) Salt
c) Paper notes
d) Cattle
Answer: c) Paper notes

3. Double coincidence of wants means—
a) Two people want the same goods
b) Two people exchange goods each desires
c) Two people use money
d) Two people store wealth
Answer: b) Two people exchange goods each desires

4. Which is the problem of carrying goods for barter?
a) Divisibility
b) Portability
c) Durability
d) Exchange rate
Answer: b) Portability

5. Which problem arises when goods cannot be divided into smaller parts?
a) Durability
b) Divisibility
c) Portability
d) Value measurement
Answer: b) Divisibility

6. Which of these is NOT a function of money?
a) Medium of exchange
b) Store of value
c) Measure of value
d) Growth of crops
Answer: d) Growth of crops

7. The first form of money in India was—
a) Digital UPI
b) Paper notes
c) Cowrie shells
d) Plastic currency
Answer: c) Cowrie shells

8. Rai stones were used as money in—
a) Africa
b) Micronesia (Yap Island)
c) India
d) Europe
Answer: b) Micronesia (Yap Island)

9. Red feather coils were used as money in—
a) Solomon Islands
b) Assam
c) Rome
d) Japan
Answer: a) Solomon Islands

10. Which is the central authority for issuing currency in India?
a) Finance Ministry
b) Parliament
c) Reserve Bank of India (RBI)
d) Supreme Court
Answer: c) Reserve Bank of India (RBI)

11. Which of the following represents durability problem?
a) Wheat rotting when stored
b) Carrying coins in purse
c) Storing paper notes
d) Using UPI
Answer: a) Wheat rotting when stored

12. “One anna was equal to 1/16 of a rupee” shows—
a) Old coinage system
b) UPI payment
c) Digital money
d) Barter system
Answer: a) Old coinage system

13. The Indian rupee symbol (₹) was designed by—
a) Raghuram Rajan
b) Udaya Kumar
c) B.R. Ambedkar
d) Amartya Sen
Answer: b) Udaya Kumar

14. In which year was ₹ symbol adopted?
a) 2000
b) 2010
c) 2015
d) 2020
Answer: b) 2010

15. Which is an example of modern money?
a) Gold
b) Silver
c) Debit cards
d) Cattle
Answer: c) Debit cards

16. The process of producing coins is called—
a) Printing
b) Minting
c) Forging
d) Carving
Answer: b) Minting

17. Which was the first country to use paper money?
a) India
b) China
c) Rome
d) Greece
Answer: b) China

18. When was paper money introduced in India?
a) 15th century
b) 18th century
c) 19th century
d) 20th century
Answer: b) 18th century

19. The RBI was established in—
a) 1935
b) 1947
c) 1950
d) 1969
Answer: a) 1935

20. Which is NOT a feature of money?
a) Portability
b) Durability
c) Divisibility
d) Edibility
Answer: d) Edibility

21. Which fair in Assam still uses barter system?
a) Pushkar Mela
b) Junbeel Mela
c) Surajkund Mela
d) Kumbh Mela
Answer: b) Junbeel Mela

22. Who issues coins in India?
a) RBI and Government of India
b) Parliament
c) State Governments
d) Supreme Court
Answer: a) RBI and Government of India

23. Which of the following is NOT digital money?
a) UPI
b) Credit card
c) Debit card
d) Wheat bags
Answer: d) Wheat bags

24. Which system allows delayed payments?
a) Barter system
b) Standard of deferred payment
c) Divisibility system
d) Portability system
Answer: b) Standard of deferred payment

25. Money acts as a measure of—
a) Colour
b) Size
c) Value
d) Strength
Answer: c) Value

26. Which Indian coins had Varaha image of Vishnu?
a) Chalukyas of Kalyana
b) Cholas
c) Mauryas
d) Guptas
Answer: a) Chalukyas of Kalyana

27. Which type of goods were exchanged in barter fairs?
a) Fruits, vegetables, herbs
b) Plastic
c) Digital tokens
d) Machines
Answer: a) Fruits, vegetables, herbs

28. Money helps compare goods and services through—
a) Barter value
b) Common standard measure of value
c) Portability
d) Durability
Answer: b) Common standard measure of value

29. The introduction of UPI happened in—
a) 2010
b) 2016
c) 2005
d) 2000
Answer: b) 2016

30. What does QR in QR code stand for?
a) Quick Response
b) Quality Result
c) Quick Resource
d) Quantitative Record
Answer: a) Quick Response

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Section B: 20 Very Short Answer Questions (1–2 lines)

1. Define barter system.
   Ans: Exchange of goods and services without money.

2. Give one example of commodity money.
   Ans: Cowrie shells.

3. What is double coincidence of wants?
   Ans: When two people have goods each desires and can exchange directly.

4. Who issues currency notes in India?
   Ans: Reserve Bank of India.

5. Name one problem of barter system.
   Ans: Lack of common measure of value.

6. Define durability in money.
   Ans: Ability to last long without damage.

7. What was the first metal used for coins?
   Ans: Gold, silver, copper.

8. Where were Rai stones used?
   Ans: Yap Island, Micronesia.

9. Name the fair in Assam where barter still exists.
   Ans: Junbeel Mela.

10. Who designed the ₹ symbol?
    Ans: Udaya Kumar.

11. In which year was ₹ symbol adopted?
    Ans: 2010.

12. What is minting?
    Ans: Process of producing coins.

13. Define currency.
    Ans: System of money used in a country.

14. What is standard of deferred payment?
    Ans: Using money to make future payments.

15. Name one modern form of money.
    Ans: Debit card.

16. What is the role of RBI?
    Ans: Issues and controls Indian currency.

17. What is QR code used for?
    Ans: Digital payments.

18. Name one problem of barter system related to storage.
    Ans: Wheat rots or gets eaten by rats.

19. Which Indian dynasty’s coins had tiger emblem?
    Ans: Cholas.

20. When was RBI established?
    Ans: 1935.

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Section C: 15 Short Answer Questions (3–4 sentences)

1. Explain the main problems of barter system.
   Ans: Lack of double coincidence of wants, difficulty in measuring value, lack of divisibility, lack of portability, and lack of durability made barter system inconvenient.

2. How did money solve the problem of barter system?
   Ans: Money became a common medium of exchange, was durable, portable, divisible, and provided a standard measure of value.

3. Explain double coincidence of wants with an example.
   Ans: If a farmer has wheat and wants shoes, he must find a shoemaker who wants wheat. This makes exchanges very difficult.

4. What are the basic functions of money?
   Ans: Medium of exchange, measure of value, store of value, standard of deferred payment.

5. Why were coins important in ancient India?
   Ans: Coins were durable, easy to carry, and accepted widely. They promoted trade within and across kingdoms.

6. What is the significance of cowrie shells in money history?
   Ans: Cowrie shells were among the earliest forms of money, used widely in India and other parts of the world.

7. How did paper money solve problems of coinage?
   Ans: Carrying and storing large amounts of coins was difficult. Paper money was lighter, portable, and suitable for higher value transactions.

8. Who controls the issue of money in India today?
   Ans: The Reserve Bank of India issues notes while Government of India issues coins.

9. What is digital money? Give examples.
   Ans: Money in electronic form. Examples: debit cards, credit cards, UPI, QR code payments.

10. Explain the importance of durability in money.
    Ans: Durable money like coins and notes lasts long, unlike wheat or cattle, which rot or die.

11. What is the cultural significance of Junbeel Mela?
    Ans: It is a traditional barter fair in Assam where tribes exchange goods without money, preserving old traditions.

12. What does the ₹ symbol represent?
    Ans: It combines Devanagari “Ra” and Roman “R” with two parallel lines, representing equality and the tricolour.

13. Why is money called a store of value?
    Ans: Because it can be saved and used for future purchases, unlike perishable goods.

14. How did coinage help trade in South India?
    Ans: Roman coins found in Tamil Nadu show active trade links between India and Rome.

15. How has money transformed over time?
    Ans: From barter to commodity money, to metallic coins, paper currency, and now digital forms like UPI and QR codes.

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Section D: 15 Long Answer Questions (6–8 sentences)

1. Explain the main limitations of barter system with examples.
   Ans: The barter system faced many problems like lack of double coincidence of wants, no common measure of value, indivisibility of goods, difficulty in storage and transportation, and lack of durability. For example, you cannot divide an ox into parts to buy smaller items like clothes. Goods like wheat rot if stored for long. These limitations made trade difficult and led to the invention of money.

2. Describe the functions of money in detail.
   Ans: Money functions as (i) medium of exchange, (ii) measure of value, (iii) store of value, and (iv) standard of deferred payment. It makes transactions easier by providing a common standard for pricing goods and services. It allows people to save wealth for future use and also to make payments later. Thus, money plays a central role in economic life.

3. Explain with examples how money made exchange easier compared to barter.
   Ans: In barter, a farmer with wheat had to find many people to exchange for shoes, clothes, medicines, etc. With money, he could sell wheat for money and then directly buy the needed items. This reduced effort, time, and confusion. It also allowed fair value comparison of goods.

4. Describe the evolution of money in India.
   Ans: India moved from barter to cowrie shells, then to metallic coins made of gold, silver, and copper. Ancient coins were minted by rulers and carried symbols of power. Later, paper money was introduced in the 18th century. Today, India uses coins, notes, and advanced forms like digital money through UPI.

5. What are the features of ancient Indian coins?
   Ans: Ancient coins were made of precious metals, carried symbols like animals, trees, or deities, and were minted by rulers. For example, Chalukya coins had the Varaha of Vishnu, while Chola coins had tiger emblems. These coins promoted trade and reflected cultural heritage.

6. Discuss the importance of RBI in India’s currency system.
   Ans: The Reserve Bank of India is the sole authority to issue currency notes. It ensures currency supply, introduces security features, and maintains stability. No one else can legally print currency. RBI also regulates modern payments like UPI and ensures smooth transactions.

7. Compare barter system and money system.
   Ans: Barter system required double coincidence of wants, lacked standard measure of value, and faced divisibility, portability, and durability issues. Money solved these by being a universally accepted medium, durable, portable, divisible, and storable. Money made trade faster and more reliable.

8. How does money act as a store of value?
   Ans: Unlike wheat or cattle, money does not perish quickly. It can be saved and used later. People can store wealth in form of money and use it for future needs. This gives security and flexibility in spending.

9. Explain the importance of coinage in India’s trade with other countries.
   Ans: Coins facilitated long-distance trade by being widely accepted. Roman coins found in Tamil Nadu and Kerala show that India had active maritime trade. Coins made transactions easier and gave traders confidence in exchange. This boosted India’s economy.

10. What led to the rise of paper money?
    Ans: Carrying heavy coins became inconvenient for large transactions. Paper money was lighter, easy to carry, and secure. It was first used in China and introduced in India in 18th century. Today, higher denominations are mostly in paper currency.

11. Describe modern forms of money.
    Ans: Modern money includes debit cards, credit cards, internet banking, and UPI. Digital money is intangible, existing only in electronic form. Payments can be made quickly by scanning QR codes. It saves time and reduces dependency on physical cash.

12. Explain with example how QR code payments work.
    Ans: A seller displays a QR code linked to his bank account. A customer scans it with a smartphone and pays digitally. For example, a fruit vendor receives money directly into his account via UPI. This is quick, secure, and cashless.

13. What is the cultural significance of barter fairs like Junbeel Mela?
    Ans: Junbeel Mela in Assam preserves age-old barter practices. Tribal communities exchange local produce like fruits, herbs, rice cakes, etc., without money. It also serves as a socio-cultural gathering, strengthening bonds and traditions.

14. Explain the security features of Indian currency notes.
    Ans: Indian notes have watermarks, security threads, raised prints, colour-changing ink, and motifs. These prevent counterfeiting and help visually impaired persons. RBI regularly updates security features for safety.

15. How has technology transformed money in recent years?
    Ans: From coins and notes, money has moved to digital forms. Online banking, UPI, QR codes, and cards make payments faster and safer. People can transact without carrying cash. Technology has globalized money and made trade seamless.

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