Which term refers to the direct exchange of goods or services without money, a practice common in traditional economies?

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

Answer: (D)

Directly exchanging goods or services without money is called barter. In traditional economies, people trade items like food, clothing, or labor directly, without currency exchanging hands. Barter works best when both sides want what the other has, which is the double coincidence of wants. It differs from currency, which is money used to facilitate transactions; payment, which is the act of giving money; and exchange in a broad sense that can include trades with or without money. Barter is the specific form of trade that eliminates money altogether.