Money also called currency often makes trade and exchange easier Money provides a way to express the value of traded items It also acts as an intermediary in the exchange People use money to engage in trade domestically domestically in their own countries They also use money to obtain goods and services from other countries Having access only to what you can produce is limiting But through trade and exchange you can gain access to goods and services produced produced by others around the world 6 Trade and Exchange
CHAPTER ONE Barter It Bartering is the direct exchange of one good or service for another good or service Thousands of years ago people in Mesopotamia in modern-day Iraq discovered the benefits benefits of bartering They traded goods they had for ones they wanted Many other groups of people did the same thing in the ancient world Bartering was done in Europe in the Middle Ages A shoemaker and a farmer might trade their products with each other so that the shoemaker had food and the farmer had shoes With the use of large ships people people had a way to reach markets in faraway lands They would take their goods for exchange and bring back goods from those places to their own lands People usually bartered goods they had in surplus or more than they needed Suppose a person in the Middle Ages wanted to trade his extra fruits for someone else’s spices 7
Trade and Exchange To make this exchange happen happen the fruit owner needs someone willing to trade spices for fruit Then the traders must agree upon a price How many fruits equal a handful of spices If the traders traveled great distances by horse to a central central marketplace timing was key The spice trader would not trade his goods for spoiled fruits Trading goods and services online allows bartering between people living nearby or far away Online searches can identify safe sites for online bartering Today people also barter online Some online bartering sites allow trades for personal care services clothing home and office space and transportation For example in 2017 Home Exchange operated in more than 150 countries allowing its members to trade homes for vacation stays SwapStyle members trade clothes shoes make-up and accessories And BabysitterExchange is a co-op that allows community members to trade services like babysitting and tutoring 8
Barter It PROS OF BARTERING In a barter exchange traders traders or parties seek to gain from an exchange A trader may be willing to trade a good that she produced too much of for other goods Or a party may value another person’s good more than her own and be willing to exchange Either way bartering bartering is a way for people to obtain goods they need or want When people from different different countries or regions barter they gain access to goods they might not have locally Bartering can expand the pool of available goods A person may own a good like a jacket that she no longer values as much as when she first bought it Trading is a way to exchange these goods for others People also barter services such as tutoring housesitting housesitting and babysitting With services people are not exchanging exchanging physical items Instead they are trading their time and effort Traders may offer services based on what they are 9
