Forms of Exchange

Three forms of Exchange Barter: People exchange one set of goods for another. Barter relies on bargaining and often results in complicated transactions. Money: Standardized means of exchange.  A standardized item that is generally traded for goods or services.  A measure of value that allows both producers and consumers to determine and express worth, and  A store of value that can be saved and used to purchase items at a later date. Credit: Allows consumers to use items before completing payment for the merchandise. Credit allows consumers to pay for an item over a specified period of time.

Value Definition: The worth of a good or service for the purposes of exchange, expressed as the amount of money that a consumer is willing to pay for a good or service. Value is also determined by the degree to which a product has utility, or usefulness to a person. Interdependence Definition: The relationship of mutual reliance and influence among people, businesses, industries, regions, and nations. Interdependence is when the events in one region of the world or sector of the economy influence events in other regions or sectors. Self-sufficiency is when a society can fulfill all of their needs without outside assistance.