From Barter to Money Class 7 Notes

From Barter to Money Class 7 Notes

From Barter to Money Class 7 Notes

1. Barter System: A way of exchanging goods and services without using money.

2. Money: The common tool that everybody accepts and uses in order to make or receive payments in exchange for goods and services.

3. Transaction: A piece of business that is done between people, especially an act of buying or selling.

4. Commodities: Products or goods that can be traded, bought, and sold.

5. Double Coincidence of Wants: An economic concept that describes a situation where two people, each having something the other wants, can exchange them directly.

6. Common Standard Measure of Value: An agreed-upon worth for a transaction that helps in determining the value of goods and services in the economy.

7. Divisibility: The capacity of an object or material to be split into pieces or portions.

8. Portability: The ability of an object or material to be carried or moved from one place to another.

9. Durability: Trait of an object or material that indicates its longevity and ability to withstand damage due to which it can be stored for a longer time period.

10. Minting: The process of producing coins. A mint refers to a manufacturing facility that produces coins that are used as a nation's currency.

11. Alloy: A metal made by combining two or more metallic elements.

12. Obverse: The side of a coin or medal bearing the head or principal design.

13. Currency: System of money that is used in a particular country. For example, coins and paper notes that are used in India in terms of rupee is the Indian currency.

14. Denominations: Units in which coins and paper notes are classified. For example, denominations of Indian currency include

₹ 1, ₹ 2, ₹ 5, ₹ 10, ₹ 20 coins and paper notes of ₹ 10, ₹ 20, ₹ 50, ₹ 100, ₹ 200 and ₹ 500.

15. QR Code: Stands for 'quick response' codes, these are collections of black and white squares, which are readable by devices like smartphones and QR scanners.

16. Challanges/Complexities/Limitation of Barter system

Challanges

1. Needs of people may not match
2. Exchange of expensive item require multiple trades
3. Transportation of goods may be inefficient and complicated

17. Limitations

1. Need double coincidence of want
2. Lack of common standard measure
3. Some goods can't easily be divisible as per needs

18. Complexity

1. Difficutly in fair exchange rate of goods
2. Storing, safety and carrying of leftover goods difficult
3. Carrying goods for future trade is difficult

19. Modern Currency

1. Notes depicted India's cultural heritage/various motifs.
2. Special features for visually impaired, easy to identify notes
3. Use of both coin, notes (₹ 1, ₹ 2, ₹ 5 , ₹ 10 and more)

20. Modern Monetary System

1. RBI - sole authority to issue currency
2. Use of digital money - QR codes, debit card, UPI
3. Digital transaction - no use of currency, directly transferred to accounts
4. QR Code - for quick and easy transaction of money

21. Role of RBI in Currency

Management

1. Sole authority to print and distribute paper currency
2. Prevents counterfeiting
3. Implements security features in currency notes
4. Currency features - Watermark, security threads, colour shifting ink
5. Facilitates various payment methods - Cash (digital/UPI)

22. Money

1. Money could solve problems and challanges of barter.
2. Coins were earliest form of money
3. Powerful rulers had their own coins
4. Coins made from - precious metals, gold, silver, etc.
5. Coin has many names - pana (Sanskrit), panam (Tamil Nadu), hana (Kannada)

23. Transition from Coin to Paper Currency

1. Initially coins used for all types of exchanges
2. Carrying and storing coins became difficult
3. Using paper money was more convenient
4. First paper money (China), Paper money in India (18th century)

24. Barter System

1. Earliest form of trade
2. No use of money, goods for goods and services
3. Items used as barter - Cowrie shells, salt, cattle, grains, clothes, etc.
4. Allow exchange of unwanted good for useful one

25. Significance of Coins

1. Made from alloys - silver, copper.
2. Modern coins-alloy of - iron, chromium, silicon, carbon.
3. Ancient coins had symbols
4. Chalukya coins - cultural and religious significance

26. Impact of Coinage on Trade

1. Boosted maritime trade (in Kerala, Tamil Nadu)
2. Shows active international trade by these regions
3. Evidence of favourable trade

27. Functions of Money

1. Allows deferred payment, partial payment
2. Acts as store of value
3. Common denomination to measure and compare values
4. Common medium of exchange
5. Made trade more efficient
6. Overcame limitations of barter