MONEY-

EXCHANGE
SYSTEM
MONEY 1. Money serves as a medium of exchange, for
goods and service which means that money acts
as an intermediary between the buyer and the

as Medium seller. ...

of 2. This money is then used to buy shoes. It is

anything that is commonly accepted by group of
people for the exchange of goods ,services and

Exchange resources.

3. Every country has their own system of coins

and paper money To serve as a medium of
exchange, money must be very widely accepted
as a method of payment in the markets for goods,
like clothes. shoes etc.
Why Money came to be used as
medium of exchange ?

Over period of time , people

and socities improved
leading to better economic
Early civilization-was busy
life ,better use
worrying about basic needs
of resources,more
and survival.
production of goods and
services beyond one's
susbsitence needs.
The search for better ways
,led to Specialization in
every sphere thereby
enhancing people's skill to
produce more things of
better quality
What is specialization
 /

ADVANTAGES OF SPECIALIZATION
Specialisation leads to trade
"Consequences of specialization is the need for trade ". Justify your answer

1. Specialization results in person to produce more than his or her need of particular goods and
services.

2. The surplus is available for exchange in the market

For eg. Farmer 's surplus food can be traded to acquire clothing ,farming,tools etc'

3. Greater the surplus greater is the volume of trade .and economic benefits
The wheel of
Economic
progess
 History of division of Labour
E A R LY H I S T O R Y
TO D AY ' S E C O N O M Y
How did barter system evolve during
early trade
What is • Bartering is the exchange of goods and
services between two or more parties
Barter System without the use of money.
• It is the oldest form of Trade. The buyer
and seller bartered goods and services
between each other based on equivalent
value of goods and services
• There is no exchange of
money between the buyer and the
seller
 Coins and Paper Money
• Metallic objects-Different forms And shapes
.
used as money around 5000 b.c

• Minting of series of coins with specific

values.

• Metals could be easily available to work on

and recycled .

• Adv: coins were given certain values which

became easier to compare costs of items
people wanted.
 Modern
Currencies
• In modern societies Paper money is most
commonly used forms of money

• Money is called as currency or unit of

exchange

• Rupee in India is the modern currency

used and most of the transactions take
place with Rupee as form of Money

• Paise is also used it is called Fractional

Rupees