Question: The process of soluble compounds being washed away from the soil by water is called: ((MCAER 2014))
Options:
Barter system
Monetary system
Credit system
Debt system
📌Other Options Explanations:
-B. A monetary system uses money as a medium of exchange.
-C. A credit system allows individuals to purchase goods or services on credit, with the expectation of paying later.
-D. A debt system involves one party owing money to another.
🔑Key Points:
✏Barter System:
-The barter system is an ancient method of trade where goods and services are exchanged directly for other goods and services without using a medium of exchange such as money.
-This system relies on a mutual agreement between the trading parties on the value of the items being exchanged.
-It is one of humanity's oldest forms of commerce, predating the invention of money or other standard mediums of exchange.
🛑Additional Information:
✏2) Exchange of goods with money:
-This refers to a monetary system where goods are bought and sold using money as the medium of exchange.
-Money facilitates transactions by providing a common measure of value.
✏3) Exchange of goods with gold:
-This could be a form of bartering if gold is directly exchanged for goods or services without using it as a standardized monetary system.
-Historically, gold and other precious metals have been used as a form of currency.
✏4) Exchange of goods with animals:
-While this could be considered a type of barter, it is more specific and less common than the overall direct exchange of goods and services.
-Barter systems often face challenges such as the double coincidence of wants, where each party must have something the other wants.
-The system can be inefficient for large or complex economies, leading to the development of money as a universal medium of exchange.