Question

Which of the following is an example of the barter system?

A.investing money in the stock market
B.taking a friend to lunch in return for a favor
C.paying $120 for a pair of diamond studded shoes
D.exchanging a twenty dollar bill for two ten dollar bills

Answer 1

Answer:

B. Taking a friend to lunch in return of a favor

Explanation:

Barter System is  direct commodity/ service to commodity/service exchange  , without using money as an intermediary exchange medium . It is also called C to C exchange .

Eg : Two farmers exchanging their wheat & rice , A teacher teaching grocers' child in exchange of groceries from him .

So : A. Simple Investment , C. Money Purchase , D. Money Denomination exchange - neither are examples of Barter System .

B . Paying off a friend's favour in exchange of a service (being service-service exchange) is a relatable  example.