NCERT Class 7 Social Science Chapter 11 From Barter to Money

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NCERT Class 7 Social Science Chapter 11 From Barter to Money

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From Barter to Money

Chapter: 11

THEME – E: Economic Life Around Us

The Big Questions? 

1. How did exchange take place before money? 

Ans: Before money, People exchanged goods or services for other goods and services. This system is called the barter system. The barter system was the earliest form of exchange. There is a lot of evidence of it from around the world. People used commodities such as cowrie shells, salt, tea, tobacco, Transaction: cloth, cattle (cows, goats, horses, sheep), seeds, etc. 

2. Why did money come into existence? 

Ans: Money came into existence because the barter system had many limitations. As trade increased and people began exchanging more goods over long distances, it became difficult to find someone who wanted exactly what you had and had what you needed. This problem, called the “double coincidence of wants,” made barter inconvenient. A common medium of exchange was needed, so money was introduced. Money made buying and selling easier, helped in storing value, and became the accepted method for all types of transactions.

3. How has money transformed into various forms over time? 

Ans: Money has evolved significantly over time. Initially, coins made from precious metals like gold, silver, and copper were issued by rulers for transactions. These coins were specific to different kingdoms but became widely accepted across regions, enabling trade. Over time, money transitioned from physical coins to paper notes, and eventually to digital forms, including bank transfers, debit/credit cards, and mobile payment systems. 

Questions and Activities

1. How does the barter system take place and what kinds of commodities were used for exchange under the system? 

Ans: Bartering is the exchange of goods and services between two or more parties without the use of money. It is the oldest form of commerce. Individuals and companies barter goods and services between each other based on equivalent estimates of prices and goods. Commodities used for exchange included items such as cattle, grains, cloth, salt, tobacco, tea, and even precious items like cowrie shells. The key aspect of bartering is that both parties involved must have something the other needs.

2. What were the limitations of the barter system?

Ans: The limitations of the barter system led to the development of money as a medium of exchange. The problems associated with the barter system are inability to make deferred payments, lack of common measure value, difficulty in storage of goods, lack of double coincidence of wants.

3. What were the salient features of ancient Indian coins? 

Ans: Salient Features of Ancient Indian Coins:

(i) Coins were primarily made of silver and copper, with some gold coins mentioned in ancient texts.

(ii) Symbols were punched onto the coins using individual punches, rather than inscriptions.

(iii) The coins lacked inscriptions of dates or the names of kings.

(iv) They facilitated trade and were used across various kingdoms.

(v) Different kingdoms issued their own coinage, often with unique designs and symbols.

4. How has money as a medium of exchange transformed over time? 

Ans: Money has evolved significantly over time. Initially, coins made from precious metals like gold, silver, and copper were issued by rulers for transactions. These coins were specific to different kingdoms but became widely accepted across regions, enabling trade. Over time, money transitioned from physical coins to paper notes, and eventually to digital forms, including bank transfers, debit/credit cards, and mobile payment systems. 

5. What steps might have been taken in ancient times so that Indian coins could become the medium of exchange across countries? 

Ans: In ancient times, several steps helped Indian coins become accepted in other countries. India traded with places like Rome, China, and Southeast Asia, which helped spread Indian coins. The coins were made using methods like punch-marking, casting, and die-striking, with die-striking still used today. They were made from valuable metals like gold and silver and often had royal symbols on them, which made people trust them. The coins were also made with a fixed weight and metal purity, so they were reliable in trade. Additionally, India’s culture and religion, such as the spread of Buddhism, helped make Indian coins accepted in other countries. These factors helped Indian coins become a common medium of exchange.

6. Read the following lines from the Arthaśhāstra. 

“An annual salary of 60 paṇas could be substituted by an āḍhaka of grain per day, enough for four meals…” (One āḍhaka is equal to about 3 kg) What does this indicate about the value of one paṇa? 

The fine for failing to help a neighbour was 100 paṇas. Compare this with the annual salary. What conclusion can you draw about the human values being encouraged through this? 

Ans: This indicates that one pañā had significant value, as an entire year’s salary was only 60 pañās. Receiving an āḍhaka (about 3 kg) of grain per day in place of salary suggests that the basic needs of an individual could be met with this modest amount.

The fine for failing to help a neighbour was 100 pañās, which was more than a year’s salary, showing that helping others was seen as a serious moral and social responsibility.

Conclusion:

This comparison shows that the society of that time strongly encouraged mutual support, community cooperation, and compassion. The high penalty highlights the importance placed on human values such as empathy, responsibility towards others, and civic duty.

7. Write and enact a skit to show how people may have persuaded each other to use cowrie shells (or other such items) as the medium of exchange. 

Ans: In ancient times, people used the barter system to exchange goods directly, like vegetables for rice. However, this system had limitations, as both traders needed to have what the other wanted. To solve this, Trader 3 introduces cowrie shells, which are valuable and widely accepted as a medium of exchange. Trader 1 can now trade vegetables for cowrie shells, and Trader 2 can trade rice for the same. This new system simplifies trade, allowing people to buy goods they need even if they don’t have a direct match. The shells act as a universal currency, making exchanges easier and more efficient.

8. The RBI is the only legal source that prints and distributes paper currency in India. To prevent illegal printing of notes and their misuse, the RBI has introduced many security features. Find out what some of these measures are and discuss them in class. 

Ans: The Reserve Bank of India (RBI) has implemented several advanced security features in Indian currency notes to safeguard against counterfeiting and misuse. 

Some of these measures include:

(i) Watermark: When held against the light, the watermark on the currency note reveals Mahatma Gandhi’s portrait, which is a key feature for identifying genuine notes.

(ii) Security Thread: The notes contain a security thread that is visible when the note is held up to the light. This thread changes color and is partially embedded in the note for additional security.

(iii) Holographic Strip: High-value notes, like the ₹500 and ₹2000 denominations, feature a holographic security strip that changes color when tilted, providing further authentication.

(iv) Microprinting: Small letters and numbers are printed on the notes, which are difficult to replicate. These can be seen only under a magnifying glass and act as an anti-counterfeit measure.

(v) Hidden Images: Certain hidden images appear when the note is held at a specific angle, adding another layer of security.

(vi) Raised Printing: Some parts of the note have raised printing, which can be felt by touch, making it harder for counterfeiters to reproduce.

(vii) UV Features: Certain elements on the notes glow under UV light, further assisting in the identification of genuine currency.

9. Interview a few of your family members and local shopkeepers, and ask them their preferences in making and receiving payments—do they prefer cash or UPI? Why?

Ans: (i) Interview with Family Members:

Question:

“Do you prefer paying in cash or using UPI (phone payment)? Why?”

Family Member 1: “I prefer UPI because it’s faster and easier. I don’t need cash and it feels safer.”

Family Member 2: “I like cash for small payments. I feel more in control, and I don’t always trust technology.”

Family Member 3: “I use both. UPI is good for big payments, but I pay in cash when I go to local shops.”

(ii) Interview with Local Shopkeepers:

Question: 

“Do you prefer getting payments in cash or UPI? Why?”

Shopkeeper 1: “I prefer UPI because it’s quick and I don’t have to handle cash. It’s also easier to keep track of sales.”

Shopkeeper 2: “Cash is better for me. I can use it right away and don’t need the internet.”

Shopkeeper 3: “I like both. UPI is convenient for many people, but I still accept cash too.”