11. From Barter to Money
A.
MCQs
1.
What is the barter system?
A.
Buying goods with paper money
B. Exchange of goods without money
C. Selling goods in markets
D. Depositing money in banks
✅
Answer: B. Exchange of
goods without money
2.
Which of the following was used as a commodity in barter exchange?
A.
Debit card
B. Cheque
C. Cowrie shells
D. ATM
✅
Answer: C. Cowrie
shells
3.
In the barter system, goods were exchanged for:
A.
Gold only
B. Services only
C. Other goods and services
D. Coins only
✅
Answer: C. Other goods
and services
4.
Which problem of barter means both persons must need each other’s goods?
A.
Durability
B. Portability
C. Double coincidence of wants
D. Divisibility
✅
Answer: C. Double
coincidence of wants
5.
Which of the following best explains divisibility?
A.
Ability to carry goods
B. Ability to divide goods into smaller parts
C. Ability to store goods
D. Ability to sell goods
✅
Answer: B. Ability to
divide goods into smaller parts
6.
Why was carrying an ox difficult in barter exchange?
A.
Problem of durability
B. Problem of value
C. Problem of portability
D. Problem of quality
✅
Answer: C. Problem of
portability
7.
Wheat rotting in storage is an example of:
A.
Divisibility
B. Portability
C. Durability problem
D. Exchange problem
✅
Answer: C. Durability
problem
8.
Money came into existence mainly to:
A.
Increase farming
B. Remove problems of barter
C. Reduce trade
D. Stop exchanges
✅
Answer: B. Remove
problems of barter
9.
Which function of money allows it to be saved for future use?
A.
Medium of exchange
B. Store of value
C. Standard of payment
D. Portability
✅
Answer: B. Store of
value
10.
Money helps compare prices of goods because it acts as:
A.
Commodity
B. Divisible item
C. Common measure of value
D. Durable product
✅
Answer: C. Common
measure of value
11.
Deferred payment means:
A.
Immediate exchange
B. Future payment
C. Exchange without money
D. Payment through goods
✅
Answer: B. Future
payment
12.
Which of the following is NOT a function of money?
A.
Store of value
B. Medium of exchange
C. Rotting of goods
D. Standard of deferred payment
✅
Answer: C. Rotting of
goods
13.
Coins were among the:
A.
Latest forms of money
B. Earliest forms of money
C. Digital forms of money
D. Illegal forms of money
✅
Answer: B. Earliest
forms of money
14.
Ancient Indian coins were mainly made from:
A.
Plastic
B. Paper
C. Precious metals
D. Wood
✅
Answer: C. Precious
metals
15.
Ancient coins had symbols called:
A.
Panas
B. Rūpas
C. Kārṣhāpaṇas
D. Mohurs
✅
Answer: B. Rūpas
16.
Coins in ancient India were controlled by:
A.
Traders
B. Villagers
C. Rulers
D. Farmers
✅
Answer: C. Rulers
17.
Which metal was commonly used in ancient Indian coins?
A.
Aluminium
B. Gold
C. Plastic
D. Rubber
✅
Answer: B. Gold
18.
Which image appeared on Chalukya coins?
A.
Tiger
B. Lotus
C. Varaha
D. Wheel
✅
Answer: C. Varaha
19.
The use of coinage increased India’s:
A.
Agriculture only
B. Maritime trade
C. Forest cover
D. Population
✅
Answer: B. Maritime
trade
20.
The ₹ symbol was adopted in:
A.
1947
B. 1950
C. 2010
D. 2000
✅
Answer: C. 2010
21.
The Indian rupee symbol was designed by:
A.
B.R. Ambedkar
B. Rajendra Prasad
C. Udaya Kumar
D. Mahatma Gandhi
✅
Answer: C. Udaya Kumar
22.
Paper currency was first used in:
A.
India
B. Rome
C. China
D. Egypt
✅
Answer: C. China
23.
Paper money was introduced in India in the:
A.
10th century
B. 15th century
C. Late 18th century
D. 21st century
✅
Answer: C. Late 18th
century
24.
Which institution controls the issue of currency in India?
A.
Parliament
B. RBI
C. Supreme Court
D. SEBI
✅
Answer: B. RBI
25.
RBI stands for:
A.
Reserve Bank of India
B. Regional Bank of India
C. Revenue Bank of India
D. Rural Bank Institution
✅
Answer: A. Reserve
Bank of India
26.
Which of the following is digital money?
A.
Gold coin
B. Wheat
C. UPI payment
D. Salt
✅
Answer: C. UPI payment
27.
QR code payments transfer money directly into:
A.
Government account
B. Seller’s bank account
C. ATM machine
D. Currency office
✅
Answer: B. Seller’s
bank account
28.
Which of the following is an intangible form of money?
A.
Coins
B. Paper notes
C. Digital money
D. Gold
✅
Answer: C. Digital
money
29.
UPI stands for:
A.
Unified Payments Interface
B. United Payment India
C. Universal Payment Index
D. Unified Public Interface
✅
Answer: A. Unified
Payments Interface
30.
Which of the following is a modern payment method?
A.
Cowrie shells
B. Debit cards
C. Wheat exchange
D. Salt trade
✅
Answer: B. Debit cards
31.
Junbeel Mela is famous for:
A.
Digital banking
B. Barter exchange
C. Coin minting
D. Currency printing
✅
Answer: B. Barter
exchange
32.
Junbeel Mela is held in:
A.
Kerala
B. Punjab
C. Assam
D. Gujarat
✅
Answer: C. Assam
33.
Which communities gathered in Junbeel Mela historically?
A.
Rajputs and Marathas
B. Tiwa, Karbi, Khasi, and Jaintia
C. Cholas and Cheras
D. Guptas and Mauryas
✅
Answer: B. Tiwa,
Karbi, Khasi, and Jaintia
34.
The Agni Puja at Junbeel Mela is a prayer for:
A.
Trade profits
B. Universal wellbeing
C. Rainfall
D. Elections
✅
Answer: B. Universal
wellbeing
35.
Exchange of old clothes for utensils is an example of:
A.
Banking
B. Online shopping
C. Barter practice
D. Coinage
✅
Answer: C. Barter
practice
36.
Which problem arises when there is no fixed value for goods?
A.
Portability
B. Durability
C. Lack of common measure of value
D. Divisibility
✅
Answer: C. Lack of
common measure of value
37.
Coins today are generally made of:
A.
Pure gold
B. Plastic
C. Alloys
D. Paper
✅
Answer: C. Alloys
38.
Which of the following is NOT a denomination of Indian currency?
A.
₹10
B. ₹100
C. ₹500
D. ₹15
✅
Answer: D. ₹15
39.
The two lines on the ₹ symbol represent:
A.
Rivers
B. National flag and equal sign
C. Roads
D. Coins and notes
✅
Answer: B. National
flag and equal sign
40.
Which statement correctly describes digital payments?
A.
They require barter exchange
B. They transfer money electronically
C. They use only coins
D. They cannot be used in shops
✅
Answer: B. They
transfer money electronically
B. Short Answer Questions
1. What is the barter system?
Answer:
- Barter system is the exchange of goods and
services without using money.
- People exchanged items they had for items they
needed.
- It depended on mutual agreement between two
people.
- Commodities like cattle, salt, cloth, seeds,
and cowrie shells were used.
2. What is meant by double
coincidence of wants?
Answer:
- It means two people must want each other’s
goods at the same time.
- Exchange happens only when both agree.
- It was difficult to find suitable people for
exchange.
- This problem made barter inconvenient.
3. Why was the barter system
difficult for traders?
Answer:
- Finding people with matching needs was
difficult.
- There was no fixed measure of value.
- Goods like animals could not be divided easily.
- Transporting and storing goods was difficult.
4. Explain the problem of
divisibility in barter system.
Answer:
- Some goods could not be divided into smaller
parts.
- Example: an ox cannot be split to buy small
items.
- It made fair exchange difficult.
- Small purchases became inconvenient.
5. What is portability? How
was it a problem in barter?
Answer:
- Portability means ease of carrying goods.
- Goods like cattle or wheat were difficult to
transport.
- Traders had to carry bulky items over long
distances.
- This reduced convenience in exchange.
6. What is durability? Why was
it important?
Answer:
- Durability means the ability to last for a
long time.
- Goods like wheat could rot or be eaten by
rats.
- Perishable items could not store value
properly.
- Durable money solved this issue.
7. Why did people start using
money?
Answer:
- Barter system had many limitations.
- Money acted as a common medium of exchange.
- It made buying and selling easier.
- It simplified trade over long distances.
8. Mention any four functions
of money.
Answer:
- Money acts as a medium of exchange.
- It serves as a store of value.
- It measures value of goods and services.
- It acts as a standard of deferred payment.
9. How does money act as a
store of value?
Answer:
- Money can be saved for future use.
- Unlike grains, it does not rot quickly.
- People can keep it safely for long periods.
- It can be used later to buy goods and
services.
10. Explain money as a common
measure of value.
Answer:
- Money helps compare prices of different goods.
- It provides a standard value for transactions.
- Buyers and sellers can decide prices easily.
- It removes confusion in exchange.
11. What is meant by deferred
payment?
Answer:
- Deferred payment means payment made later.
- Money allows people to borrow and repay in
future.
- Loans and salaries use this system.
- It supports economic activities smoothly.
12. What were the main
features of ancient Indian coins?
Answer:
- Coins were made of metals like gold, silver,
and copper.
- They had symbols and motifs engraved on them.
- Different kingdoms issued their own coins.
- Coins helped increase trade across regions.
13. Who controlled coin
minting in ancient times?
Answer:
- Kings and rulers controlled minting of coins.
- They issued coins for their kingdoms.
- Powerful rulers’ coins became widely accepted.
- This improved trade between kingdoms.
14. What do the symbols on
ancient coins tell us?
Answer:
- Symbols represented rulers, deities, and
nature.
- They reflected culture and beliefs of
kingdoms.
- Some coins had animals, trees, and religious
symbols.
- They help historians study ancient trade and
society.
15. How did coinage help
trade?
Answer:
- Coins provided a common medium of exchange.
- They reduced difficulties of barter.
- Trade became easier across long distances.
- Merchants accepted coins more easily.
16. Why was paper money
introduced?
Answer:
- Carrying many coins became difficult.
- Storing heavy coins was inconvenient.
- Paper currency was lighter and easier to
carry.
- It made large transactions simpler.
17. What is currency?
Answer:
- Currency is the system of money used in a
country.
- It includes coins and paper notes.
- Indian currency is measured in rupees.
- It is issued by the Reserve Bank of India.
18. What is the role of RBI in
currency management?
Answer:
- RBI controls printing of currency notes.
- It issues legal currency in India.
- It prevents illegal printing of money.
- It manages circulation of currency.
19. What is digital money?
Answer:
- Digital money exists in electronic form.
- It cannot be physically touched like notes or
coins.
- Payments are made through phones and
computers.
- Examples include UPI, debit cards, and net
banking.
20. How has technology changed
the use of money?
Answer:
- Digital payments have become common.
- Transactions are faster and easier.
- People can transfer money instantly.
- Online banking reduces the need for cash.
C. Long
Answer Questions
1.
Explain the barter system and its working.
Answer:
- Barter system is the exchange of goods and
services without using money.
- People exchanged items they had for items they
needed.
- Exchange depended on mutual agreement between
two parties.
- Commodities like cattle, salt, cloth, cowrie
shells, tea, and seeds were used.
- Example: exchanging an eraser for a pencil.
- It was the earliest form of economic exchange.
2.
Explain the limitations of the barter system.
Answer:
- Double coincidence of wants was necessary.
- There was no common measure of value.
- Goods like animals could not be divided
easily.
- Transporting goods was difficult.
- Many goods were not durable and spoiled
quickly.
- Barter became inconvenient for large-scale
trade.
3.
What is double coincidence of wants? Explain with example.
Answer:
- It means both people must want each other’s
goods at the same time.
- Exchange happens only if both agree.
- Example: a farmer with wheat must find someone
needing wheat and offering desired goods.
- Finding suitable people was difficult.
- It slowed down trade activities.
- This problem led to the need for money.
4.
Explain the problems faced by the farmer in the chapter.
Answer:
- The farmer had only an ox to exchange.
- He needed shoes, medicines, and a sweater from
different people.
- Finding someone willing to exchange all items
for an ox was difficult.
- Carrying goods like wheat was inconvenient.
- Wheat could rot or get eaten by rats.
- Dividing the ox into smaller exchanges was
impossible.
5.
Explain the problems of divisibility, portability, and durability in barter
system.
Answer:
- Divisibility problem arose because goods like
oxen could not be split easily.
- Portability problem occurred because goods
were bulky to carry.
- Durability problem happened because goods like
grains spoiled quickly.
- These problems made barter inconvenient.
- Trade over long distances became difficult.
- Money solved all these issues.
6. Why
did people feel the need for money?
Answer:
- Barter system created many practical
difficulties.
- Exchange required double coincidence of wants.
- Goods lacked standard value measurement.
- Carrying and storing goods was difficult.
- Trade increased across larger distances.
- Money provided an easier and accepted medium
of exchange.
7.
Explain the basic functions of money.
Answer:
- Money acts as a medium of exchange.
- It serves as a store of value for future use.
- It measures value of goods and services.
- It acts as a standard of deferred payment.
- It makes buying and selling easier.
- It simplifies trade and economic activities.
8. How
does money act as a store of value?
Answer:
- Money can be saved for future use.
- Unlike grains, it does not spoil quickly.
- People can safely store it for long periods.
- It can be used later for purchases.
- Savings help during emergencies.
- This makes money reliable and useful.
9.
Explain how money works as a common measure of value.
Answer:
- Money gives a standard price to goods and
services.
- It helps compare values of different products.
- Buyers and sellers can decide fair prices.
- It removes confusion during exchange.
- Trade becomes easier and faster.
- It creates uniformity in transactions.
10.
Explain the role of money as a standard of deferred payment.
Answer:
- Deferred payment means payment made later.
- Money allows borrowing and repayment in
future.
- Salaries, loans, and instalments use this
system.
- It supports modern banking and trade.
- People trust money for future payments.
- This function encourages economic growth.
11.
Describe the development of coinage in ancient India.
Answer:
- Coins were among the earliest forms of money.
- Kings and rulers issued coins for
transactions.
- Coins were made of gold, silver, and copper.
- Symbols and motifs were engraved on them.
- Powerful kingdoms’ coins became widely
accepted.
- Coinage increased trade across regions.
12.
What were the main features of ancient Indian coins?
Answer:
- Coins were called kārṣhāpaṇas or paṇas.
- They were made from precious metals and
alloys.
- Coins had symbols of kings, animals, and
deities.
- Different kingdoms had different coin designs.
- Coins helped in smooth trade and taxation.
- They reflected culture and political power.
13.
How did coinage help trade and economy?
Answer:
- Coins provided a common medium of exchange.
- They reduced problems of barter.
- Trade became easier across kingdoms.
- Merchants accepted standard coins confidently.
- Maritime trade with foreign countries
increased.
- Economic activities expanded rapidly.
14.
Why was paper money introduced?
Answer:
- Carrying large numbers of coins became
difficult.
- Coins were heavy and hard to store.
- Paper money was lighter and convenient.
- It made large transactions easier.
- Currency system became more organised.
- Trade and banking improved with paper notes.
15.
What is currency? Explain different denominations in India.
Answer:
- Currency is the money system used in a
country.
- Indian currency is measured in rupees.
- It includes coins and paper notes.
- Coins are used for smaller values.
- Notes are used for larger denominations.
- Examples include ₹1, ₹10, ₹100, ₹500, etc.
16.
Explain the role of the Reserve Bank of India (RBI).
Answer:
- RBI controls the issue of currency in India.
- It prints and distributes paper notes.
- It manages circulation of money.
- RBI prevents illegal printing of notes.
- It maintains trust in the currency system.
- It supports financial stability in the
country.
17.
What is digital money? Explain its advantages.
Answer:
- Digital money exists in electronic form.
- Payments are made using phones or computers.
- Examples include UPI, debit cards, and net
banking.
- Transactions become fast and convenient.
- It reduces the need to carry cash.
- Digital payments increase transparency.
18.
Explain how technology has changed money transactions.
Answer:
- Technology introduced digital payment systems.
- People now use UPI and online banking.
- Transactions happen instantly.
- QR codes allow easy payments.
- Cashless payments are becoming common.
- Economic activities have become faster and
safer.
19.
Describe the Junbeel Mela as an example of barter system.
Answer:
- Junbeel Mela is held annually in Assam.
- Tribal communities exchange local products.
- Goods like vegetables, herbs, and spices are
traded.
- Handmade goods are exchanged for rice cakes
and food.
- The fair promotes cultural unity and
friendship.
- It shows barter practices still exist today.
20.
Compare barter system and money system.
Answer:
- Barter uses direct exchange; money uses
currency.
- Barter requires double coincidence of wants.
- Money provides a common measure of value.
- Money is portable and durable.
- Barter is inconvenient for large trade.
- Money makes transactions faster and easier.
D.
Assertion–Reason Questions
1.
Assertion
(A):
The
barter system required double coincidence of wants.
Reason
(R):
Both
people involved in exchange needed to want each other’s goods.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
2.
Assertion
(A):
Barter
system became difficult as trade increased.
Reason
(R):
People
found it difficult to transport and store goods.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
3.
Assertion
(A):
Money
solved the problem of divisibility.
Reason
(R):
Money
can be divided into smaller units for transactions.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
4.
Assertion
(A):
Wheat
was not a good store of value in barter system.
Reason
(R):
Wheat
could rot or get eaten by rats.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
5.
Assertion
(A):
Ancient
coins were made from metals like gold and silver.
Reason
(R):
Precious
metals were durable and widely accepted.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
6.
Assertion
(A):
Paper
money replaced coins for many transactions.
Reason
(R):
Carrying
large numbers of coins was difficult.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
7.
Assertion
(A):
The
Reserve Bank of India controls the issue of currency.
Reason
(R):
Only
RBI has legal authority to print Indian currency notes.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
8.
Assertion
(A):
Money
acts as a common measure of value.
Reason
(R):
Money
helps compare prices of goods and services.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
9.
Assertion
(A):
Money
is accepted as a standard of deferred payment.
Reason
(R):
People
can make payments at a future date using money.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
10.
Assertion
(A):
Digital
money is becoming popular today.
Reason
(R):
People
can transfer money electronically through UPI and banking apps.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
11.
Assertion
(A):
The
barter system still exists in some places today.
Reason
(R):
Events
like Junbeel Mela continue traditional exchange practices.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
12.
Assertion
(A):
Coinage
helped India’s maritime trade grow.
Reason
(R):
Indian
coins were accepted in many trading regions.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
13.
Assertion
(A):
Portability
was a major problem in barter system.
Reason
(R):
Goods
like cattle and grains were difficult to carry everywhere.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
14.
Assertion
(A):
Different
kingdoms issued their own coins in ancient India.
Reason
(R):
Coin
minting was controlled by rulers.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
15.
Assertion
(A):
Money
became widely accepted because it simplified trade.
Reason
(R):
Money
removed many difficulties of the barter system.
Answer:
✅
Both A and R are true, and R is the correct explanation of A.
*******