Chapter 11: From Barter to Money
Before coins and notes, people swapped goods. In this chapter we explore the barter system and its problems, discover why money was invented and what it does, follow money's journey from cowries and punch-marked paṇas to paper notes, and see how digital payments like UPI are changing money again.
In this chapter you will
- explain the barter system and its limitations
- describe the functions of money
- trace the history of coins and paper money in India
- describe digital forms of money
Topics
- The Barter System NCERT 11.1
Barter is the direct exchange of goods or services without money.
- Why Do We Need Money? NCERT 11.2
Barter suffers from double coincidence of wants and no common measure of value.
- Basic Functions of Money NCERT 11.3
Money is a medium of exchange, a store of value and a measure of value.
- The Journey of Money: Coins and Paper Money NCERT 11.4
Ancient paṇas were punch-marked coins of precious metals; Roman coins in Tamil Nadu show trade with Rome.
- New Forms of Money NCERT 11.5
Digital money (cards, net banking, UPI, QR codes) moves money between bank accounts electronically.
Key words
- Barter
- exchanging goods directly without money
- Double coincidence of wants
- each person having what the other wants
- Medium of exchange
- something everyone accepts in payment
- Store of value
- keeping value to use later
- Minting
- making coins
- Denomination
- the value unit of a coin or note
- Digital money
- money in electronic form, like UPI
Summary
- Barter exchanges goods directly; it suffers from double coincidence of wants and other problems.
- Money is a medium of exchange, store and measure of value, and standard of deferred payment.
- India's money evolved from cowries and punch-marked paṇas to paper notes issued by the RBI.
- Digital money like UPI is the latest form; all money depends on trust.