• Card 24 / 100: Describe a society in which the people practice indirect exchange, but have not yet developed money.

    Answer:
    If there is indirect exchange, it means that at least some people in the society accept goods that they don't directly want (for production or consumption). So there are media of exchange. However, if money has not yet developed, it means that there is no one medium of exchange that everyone is willing to accept. In other words, some members of the community accept Medium of Exchange #1, while some others accept Medium of Exchange #2, and so forth. In a monetary economy, (virtually) everyone accepts the same medium of exchange.

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Capitalism: The Market Economy

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Attribution:  Dr. Robert P. Murphy, Lessons for the Young Economist. (Mises Institute), http://mises.org/document/6215/Lessons-for-the-Young-Economist (Accessed 04 April, 2014). License: Creative Commons BY
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