What is the biggest problem with the Barter System?

The primary issue is the Double Coincidence of Wants. A trade can only occur if the person holding a good finds a person who both desires that good and possesses the good the first individual wants. This can be a challenging and lengthy process.

What are the four main functions of money?

The four main functions of money are: Medium of Exchange: Used for all buying and selling. Measure of Value: Used to set and compare prices. Store of Value: Allows wealth to be saved for future use. Standard of Deferred Payment: Enables payments for credit or loans to be made later.

How did money solve the problem of the lack of a common measure of value?

Money serves as a Common Measure of Value (or Unit of Account). It assigns a price in a common unit (Rupees) to every good and service, and allows comparisons of value. Everyone knows that if a pen costs ₹10 and a book cost ₹100, then we know the book is worth ten times the pen.

Give an example of Commodity Money.

Commodity Money is when an item that has value in itself is used as a medium of exchange. Examples include cattle, salt, grains, and cowrie shells used in ancient times.

How has money changed in modern times?

In modern times, money has moved from physical forms to Digital Money. We use paper currency and coins, but increasingly, we rely on Debit/Credit Cards, Net Banking, and UPI (Unified Payments Interface), which allow for instant, cashless transactions directly between bank accounts.

NCERT Solutions for Class 7 Social Science Chapter 11 - Economic Life Around Us: From Barter to Money

NCERT Solutions Class 7 Social Science Chapter 11 From Barter to Money

Within this chapter, we will divest the compelling history of how human society evolved from a system of direct exchange, to the intricate monetary system we employ today. It provides insight into the Barter System (the exchange of goods for goods) and its limitations, which ultimately initiated the use of money as a widely accepted bargaining mechanism. This chapter discusses both what money does and how it has evolved, beginning with early commodities, to digital cashless transactions.

The NCERT Solutions provide straight and simple answers to the questions raised during the chapters which makes reviewing key terms and concepts easier. Understanding the evolution of money is paramount to understanding how modern economies function and the role that money plays in trade, saving and value commodity exchange.

2.0Important Concepts of Class 7 Social Science Chapter 11 From Barter to Money - Brief Explanation

This chapter explores the historical shift in economic activity, highlighting why the basic system of trading goods directly became unsustainable as human needs and trade expanded.

Concepts Covered in this Chapter:

The Barter System: Direct exchange of goods or services without using money. Early examples include cowrie shells, salt, and cattle.

Limitations of Barter: The core problems that made the system inefficient, primarily the Double Coincidence of Wants and the Lack of Common Measure of Value.

Functions of Money: The four key roles money plays: Medium of Exchange, Measure of Value, Store of Value, and Standard of Deferred Payment.

Evolution of Money: The transition from Commodity Money to Metallic Coins, Paper Currency, and finally Digital Money (UPI, cards).

This chapter demonstrates that money is not just a piece of paper or metal, but a crucial invention that simplified trade, enabled specialization, and accelerated global economic development.

3.0NCERT Class 7 Social Science Chapter 11 From Barter to Money - Detailed Solutions

How did the barter system take place and what commodities were used? Ans. Under barter, people exchanged goods or services directly without money-e.g., a farmer might trade grain for shoes. Common items used included cattle (cows, goats), food grains (wheat, rice), cloth, salt, tobacco, seeds, and even cowrie shells in some places

What were the limitations of the barter system? Ans. (i) Double coincidence of wants: Both parties needed to want what the other offered. (ii) No common measure of value: Hard to decide fair exchange rates. (iii) Indivisibility: Some goods (like livestock) couldn't be divided. (iv) Portability: Bulky items were hard to carry. (v) Durability: Perishable goods could spoil or get damaged

What were the salient features of ancient Indian coins? Ans. (i) Made from precious metals such as silver, gold, copper, and alloys. (ii) Called kārṣhāpaṇas or paṇas, they had symbols called rūpas punched on them They followed standardized weights (e.g. 32 rattis or

\sim 3.3 g

for a karshapana) (iii) Designs typically included animals, trees, hills, deities, royal emblems; sides known as obverse and reverse

How has money as a medium of exchange transformed over time? Ans. Money evolved from barter to commodity money (like cowrie shells), then to metal coins (

\sim 600

BCE), followed by paper currency (introduced in India in 1861), and finally to digital money such as debit/credit cards, net banking, and UPI from around 2016

What steps might have been taken in ancient times so Indian coins became a medium of exchange across countries? Ans. (i) Minting coins from valuable metals (gold, silver) and with standard weights and purity, enabling trust abroad. (ii) Powerful kingdoms issued widely accepted coins. (iii) India's extensive maritime and land trade networks, including Roman trade, helped spread coin usage. (iv) Use of recognizable symbols and punched marks, boosting acceptance in foreign markets

On Arthaśhāstra lines: Value of one pana and human values encouraged Ans. (i) Value of one pana: An annual salary was 60 panas, and this amount could be substituted by a daily food provision of an āḍhaka (

\sim 3 kg

of grain) for four meals. Over a year (

\sim 365

days), that totals

\sim 1, 095 kg

of grain. So one pana equated to roughly 18 kg of grain (ii) Fine vs annual salary: The fine for failing to help a neighbour was 100 panas-well above the annual income of 60 panas. This suggests that society placed greater social importance on compassion and mutual aid than on personal financial gain. The strict penalty reveals how much communal responsibility was valued.

4.0Key Features of the NCERT Solutions Class 7 Social Science Chapter 11 From Barter to Money

The solutions for this chapter are designed to make the evolution of economic systems clear and easy to understand. Here's what makes them stand out:

Thorough Understanding of Economic History: The solutions implicitly define and compare Barter and Monetary Systems while providing historical context for the change in methods of exchange.

Focus on the Basic Economic Issues: The important concept of the chapter, Double Coincidence of Wants, is fully described to provide reasons for why money was needed

Simplified Functions of Money: The four main functions of money—Medium, Measure, Store, and Standard—are described in simple points so you can easily remember them.

Chronological Journey in Evolution: The content describes the evolution of money starting with materials as money (shells) to metals, paper, and Digital Payments (UPI).

NCERT Textbook Coordination: Each answer is purposefully created to respond to the questions and learning aims within the NCERT textbook. Answer are constantly checked against the textbook to make certain you are accurate and exam ready.

Deeper Conceptual Understanding: Students will have a rich understanding of not just what money is, but why it was invented. This will provide a strong foundation for future economic studies.

Increased Confidence in Taking Exam: The step-by-step, accurate answers allow students to easily self-assess their understanding of complex concepts and feel confident in preparing for tests and examinations.

Critical Thought Development: The material encourages students to think critically by comparing the Barter system's issues of efficiency, storage, and measurement to the convenience of the Monetary system.

Vocabulary Development: Important economic vocabulary such as Medium of Exchange, Store of Value, and Indivisibility are repeated and defined in context which will increase the student’s academic vocabulary.

Real World Application: By linking ancient trades to digital trades of the modern world, the answers will connect students’ classroom learning and real world economy they interact with each day.

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