Experts have designed these Class 7 SST Notes Chapter 11 From Barter to Money Class 7 Notes for effective learning.
Class 7 From Barter to Money Notes
Class 7 SST Chapter 11 From Barter to Money Notes
Class 7 SST Chapter 11 Notes – From Barter to Money Notes Class 7
→ Barter System: Exchange of goods or services without using money.
→ Money: A universally accepted medium for transactions (to buy or sell anything).
→ Double Coincidence of Wants: Two parties each having what the other desires for a direct trade.
→ Common Standard Measure of Value: A system to compare the worth of different goods/services.
→ Divisibility: The ability to split into smaller units for transactions.
→ Portability: Ease of carrying from one place to another.
→ Durability: Ability to withstand long-term use without perishing.
→ Commodities: Physical goods that could be traded (bought or sold).
→ Minting: The process of producing currency coins is called minting.
→ Alloys: The process of mixing two metallic elements to make it stronger.
→ Coinage: Metallic money stamped with symbols or designs.
→ Obverse & Reverse: The two sides of a coin (head and tail).
→ Currency: A country’s official system of money (coins and notes).
→ Digital Money: Electronic form used for transactions.
→ Reserve Bank of India (RBI): India’s central bank regulating currency issuance.
→ Store of Value: Retains worth over time for future use.
→ Denomination: It refers to the specific value or face value of coin or banknote.
→ Transaction: Making a payment to buy or sell any product or services.
→ QR code: Quick Response Code also known as QR code, can store information like URLs.
From Barter to Money Class 7th Notes
- Barter system was the earliest form of exchange around the world, in which people used to exchange good or services for other goods or services.
For instance, vendor visiting homes and exchanging new utensils with old clothes. Similarly, commodities like tea, salt, tobacco, clothes, cattle etc. were exchanged. Today, we use currency notes and coins to purchase or sell anything, besides using mobile phones and computers for online transactions. The barter system, while functional, faced challenges like the double coincidence of wants, lack of a common measure of value, and issues of divisibility, portability, and durability.
WHY DO WE NEED MONEY?
The limitations of the barter system led to the invention of money. A farmer’s story illustrates these challenges:
- Double coincidence of wants: Finding someone who needs an ox and offers shoes, a sweater, and medicines in return is rare.
- Lack of common value measure: Disputes arose over fair exchange ratios (e.g., how much wheat equals a pair of shoes?).
- Divisibility and probability: Taking the ox to different place to exchange it for other goods is practically not convenient.
- Durability: Perishable goods (e.g., wheat) could not be stored long-term.
- Money emerged as a solution to these problems, simplifying transactions and enabling efficient trade.
BASIC FUNCTIONS OF MONEY
Money serves four key purposes:
- Medium of exchange: Accepted universally for buying/ selling goods (e.g., paying a shopkeeper).
- Store of value: Can be saved and used later (unlike perishable bartered goods).
- Common denominaton: Provides a standard to compare prices (e.g., a book costs ?100).
- Standard of deferred payment: Allows future payments (e.g., paying a shopkeeper in instalments).
THE JOURNEY OF MONEY
Coinage
- Coins were the earliest form of money and they were produced (minted), issued and controlled by the Kings.
- Early coins were made of precious metals like gold, silver, copper, or alloys (e.g., Chola coins with tiger emblems).
- Featured symbols of rulers, deities, or nature (e.g., Chalukyan coins with avatars of Lord Vishnu).
- Coins have two sides, the head called obverse and the tail called reverse.
- Many different kinds of symbols were engraved by different dynasties depending on their culture and of their King, Queen, local deities, natural motifs like hills, trees, animals etc.
- Exchange of coins also helped India’s maritime trade to expand overseas during ancient times.
- The term “pana” (ancient Indian currency) evolved into regional words like “paisa.”
Paper Money
- Introduced in China and later in India (18th century) to address the bulkiness of coins.
- Issued by central authorities like the Reserve Bank of India (RBI) with security features (e.g., tactile marks for the visually impaired).
- Examples: Historic uniface notes from the Bank of Bengal and modern currency with cultural motifs.
NEW FORMS OF MONEY
- Digital money: Includes UPI, QR codes (e.g., fruit-seller Krishnappa accepting mobile payments), debit/credit cards, and net banking.
- Intangible and convenient, reducing reliance on physical cash.
CONCLUSION
- Barter system: Early trade method with limitations like double coincidence of wants.
- Money’s role: Solves barter’s problems by acting as a medium of exchange, store of value, and measure of value.
- Evolution: From commodities → coins → paper currency → digital payments.
- Modern practices: RBI regulates currency; digital transactions (e.g., UPI) dominate today.
- Cultural continuity: Some barter traditions persist (e.g., Junbeel Mela in Assam).