Essential Question: Exchange SECTION 4 Identify the three ways that an exchange can be completed, Describe which of the three ways is most preferable and why; explain why exchanges are necessary using the terms self-sufficiency and Interdependence

Barter scenario IN-CLASS ONLY!!! SECTION 4 Exchange Barter scenario IN-CLASS ONLY!!! Clear off the front of your desk for a moment Take out one item that belongs to you and hold it in your hand then stand up around the room Look at what others have up. See if A.) There is anything that you want, and B.) See if the person is willing to trade it to you…

Exchanges and why?: Exchange SECTION 4 Exchanges are how individuals obtain the things that they need or want A producer and a consumer agree to exchange one type of item for another Exchanges can be completed 3 ways: Barter Money Credit

Difficulties associated with bartering: SECTION 4 Exchange Difficulties associated with bartering: relies on bargaining results in complicated transactions since both sides have to agree that the items being traded are equal.

Why money is preferred?: SECTION 4 Exchange Why money is preferred?: Exact value can be easily agreed upon Money is any readily available and accepted item possessing value (shells, coins, paper) Money can be exchanged multiple times between different producers and consumers

Credit: Exchange SECTION 4 Credit is a service where a person receives and uses an item before completing payment Usually requires person receiving credit to pay a service fee called interest to the person providing credit. Since the item being bought with credit also includes the cost of interest, credit is a more expensive way to complete exchanges.

Self-Sufficiency vs. Interdependence: SECTION 4 Exchange Self-Sufficiency vs. Interdependence: Being Self-Sufficient means you can satisfy all of your own wants and needs without outside help! But, 1.) It requires a large supply of tools, equipment, and raw materials 2.) It demands extensive skills and knowledge in a variety of fields to produce all that you need. Interdependence means you exchange with others to get what you need. This can allow societies to use resources more efficiently