• Card 26 / 100: Explain how a community could use indirect exchange but not have money.

    Answer:
    So long as some people in the community accept items in trade that they intend to trade away in the future, then the community uses indirect exchange. However, if it so happens that no single commodity is accepted as a medium of exchange by everybody in the community, then there wouldn't be a money. In other words, even though lots of people might accept objects intending to trade them away again, the people use different objects in this way. Sample Partial Credit Answer When someone visits another country, his money isn't accepted and he doesn't think what they use is "money" either. But the people in that country aren't using barter.

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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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