Question

A ____________ system involves the direct exchange of goods and services without the use of money as a medium of exchange.

Answer 1

A barter system involves the direct exchange of goods and services without the use of money as a medium of exchange.

Answer 2

The correct answer is: "BARTER"

Barter is a system of exchange that does not involve the use of money. It was the manner of conduting trade that was used in ancient civilizations until money was invented in China in the seventh century. It consists on one party that exchanges goods and services that needs and does not have, for others that that a different party has and does not need. These exchanges require a time-consuming process of finding two parties which are interested in performing each specific exchange.