What term describes the direct exchange of goods or services without the use of money?

• A. Currency
• B. Barter
• C. Payment
• D. Exchange

Answer: (B)

Barter is the direct exchange of goods or services without money. This term captures the idea of trading one thing for another without using currency to settle the deal. For example, trading a loaf of bread for a dozen eggs illustrates barter in action. It works, but it relies on a double coincidence of wants—both people must want what the other has—which can make transactions harder and less efficient. Money, by contrast, serves as a common medium of exchange and a unit of account, which helps avoid that problem. Currency, payment, and exchange describe related ideas, but barter specifically refers to exchanging items directly without money.