In Class 9 Introduction to Financial Markets, the chapter “Money and Exchange System” explains how people used to exchange goods through the barter system and how it created many difficulties. To solve these problems, money was introduced as a medium of exchange.
Money Exchange System Class 9 NCERT Solutions
I. Choose the correct answer.
Q. People in early civilization were too busy worrying about __.
a) survival
b) savings
c) education
Q. Specialisation means people become __.
a) hard-working
b) more skilled
c) more intelligent
Q. In our early history, the degree of division of labour was __.
a) plenty
b) limited
c) not found
Q. __ is one of the difficulties in using commodities as money.
a) Hard to carry
b) Measuring
c) Conversion
Q. Metal objects in different forms and shapes were introduced as money many years ago, probably around __.
a) 2000 BC
b) 4000 BC
c) 5000 BC
II. Fill in the blanks.
Q. __ is anything that is commonly accepted by a group of people for the exchange of goods, services, or resources.
Q. Money is used as the __ between the buyer and the seller for the goods purchased.
Show Answer ⟶Q. Red Indians were able to provide __ for trade with the Europeans.
Show Answer ⟶Q. Money is also called as __.
Show Answer ⟶Q. The currency used in Germany is called __.
Show Answer ⟶III. Match the following.
- Specialisation – division of labour
- Red Indians – good at hunting
- Commodity money – a basic item used by everyone in the past
- Fractional Rupees – Paise
- Trade – surplus beyond the personal need
IV. True or false.
Q. As long as the output of the economy is made up of relatively few goods and services, a barter system can function successfully.
Show Answer ⟶Q. In the past, salt, tea, tobacco, cattle and seeds were once used as money.
Show Answer ⟶Q. Since coins were given certain value, it became difficult to compare the cost of items people wanted.
Show Answer ⟶Q. In modern societies today, coins and paper money are the most commonly used forms of money.
Show Answer ⟶Q. Metal coins cannot be recycled.
Show Answer ⟶V. Answer the following briefly.
Q. Write short notes on trade.
Answer: In early times, people only focused on survival by finding food, water, and shelter, but later on, they started making better tools, growing more food, and creating useful things. This led to specialising in one skill and becoming experts. Because of specialisation, people need to trade, like a farmer could trade food for clothes made by a tailor. This kind of trade is called bartering, which means giving one thing to get another.
Q. Describe briefly about division of labour.
Answer: Specialization is associated with the concept of the division of labour, that is labour becomes specialized and concentrated on certain activities. Rather than trying to do everything or many things, a person concentrates his or her labour skills on one activity or on just a few activities in which he or she is good at.
Q. What is commodity money?
Answer: A commodity is a basic item used by almost everyone. In the past, salt, tea, tobacco, cattle and seeds were commodities and therefore were once used as money.
Q. Describe briefly the money used in India.
Answer: In India the currency we use is called the Indian Rupees. We pay money in the form of Rupees to buy things. We also pay in paise, which are called fractional rupees. Rupees and paise are modern currencies used today, unlike in the olden days when people used barter.
VI. Answer in detail.
Q. Explain bartering and commodity money.
Answer: Bartering is the oldest form of trade, where people exchanged goods and services directly without using money. To solve this problem commodity money was introduced. This meant using items that had value and were widely accepted like salt, tea, tobacco or cattle as medium of exchange.
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