Question 24 / 96:  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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