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what is exchangeWhat is barter?

Barter: Barter is process where people exchange goods and services without using money. Barter was famous in the era of ancient, but in the new era of business money became the medium of exchange.

What is money?

Money: Most of the people have misconception about money. They often say money means currency of their country, but money is the universally accepted medium of exchange or you can say the universal medium of exchange is called money. For example: I buy goods and services from market in exchange of money.

What is exchange?

Exchange: Exchange is a process in which two or more parties provide something of similar value to one another to satisfy each other needs.

Characteristics of exchange: There are four characteristics of exchange that is mentioned below:

  • At least two parties: Exchange can not be done in one party there have to be two parties. It can be even done between more than two parties.
  • Change in financial condition: Exchange must bring change in financial condition. If it does not bring change in financial condition then it will not be called exchange.
  • Measured in monetary terms: Whatever you exchange it has to be measured in monetary terms. It is a most common and important characteristics of exchange.
  • Free consent: Both parties have to free consent, if one party create pressure to another to do exchange then it will not be called exchange.
What are the characteristics of exchange?
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