Class 7 Social Science Chapter 11: From Barter to Money | Barter System Problems, Need for Money, Double Coincidence of Wants, Properties & Forms of Money
Complete Chapter 11 guide: how people exchanged goods in the barter system, real problems like double coincidence of wants, lack of standard value, divisibility, portability and durability, why money was invented as a common medium of exchange, early “money” objects (cowries, salt, cattle, metal objects, Rai stones, feather coils), and how modern money includes coins, notes and digital payments, with story-based examples (farmer, Junbeel Mela) plus summary, Q&A, extra questions and quiz for CBSE Exam
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Categories: Class 7 Social Science, NCERT Notes 2025, Economic Life Around Us, Money and Barter, Basic Economics for Class 7, CBSE Exam Preparation, Q&A and Quizzes
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Class 7 Social Science Chapter 11: From Barter to Money – Complete NCERT Notes, Activities, Questions & Answers 2025
From Barter to Money
Class 7 Social Science Chapter 11 | Complete NCERT Guide | Barter System, Evolution of Money, Functions 2025
Full Chapter Summary & Detailed Notes – From Barter to Money
Opening Idea – What is Money?
Money is a link between present and future (Keynes). It evolved from barter to coins, paper, digital forms.
Chapter traces exchange from barter to modern money, highlighting limitations and functions.
The Three Big Questions of the Chapter (Most Important for Exams)
How did exchange take place before money? (Barter system)
Why did money come into existence? (Limitations of barter)
How has money transformed into various forms over time? (Coins, paper, digital)
Barter System – Earliest Exchange
Aspect
Description
Examples
Definition
Exchange goods/services without money
Eraser for pencil
Commodities Used
Cowrie shells, salt, tea, tobacco, cloth, cattle
Rai stones (Yap Island), Tajadero (Mexico), Tevau (Solomon Islands)
Evidence
Worldwide, including ancient India
Food grains, carnelian beads
Why Need Money? – Limitations of Barter
Double Coincidence of Wants: Both parties must want each other's goods.
Common Measure of Value: Hard to compare goods' worth.
Exam Golden Line: “Key limitation of barter system.”
Common Standard Measure of Value
Definition: Agreed worth for transactions.
Examples: Prices in rupees.
Exam Tip: Money provides this uniformity.
Divisibility
Definition: Ability to split into portions.
Examples: Can't divide ox; money can.
Exam Golden Line: “Barter items often indivisible.”
Portability
Definition: Ease of carrying.
Examples: Wheat bags heavy; notes light.
Exam Tip: Limitation of bulky barter goods.
Durability
Definition: Longevity without damage.
Examples: Wheat rots; coins last.
Exam Golden Line: “Money durable unlike perishables.”
Currency
Definition: Money system in a country.
Examples: Rupee notes/coins.
Denominations
Definition: Units of money (e.g., ₹10, ₹50).
Exam Tip: Coins for small, notes for large.
QR Code
Definition: Scannable code for digital payments.
Exam Tip: Modern intangible money.
Exam Quick Tips & Mnemonics
Most Important Terms: Barter, Double Coincidence, Functions of Money
Mnemonic for Limitations: “D C D P D” → Double Coincidence, Common Measure, Divisibility, Portability, Durability
Mnemonic for Functions: “M S C D” → Medium, Store, Common Denomination, Deferred Payment
Golden 5-Mark Line:
“Money solved barter's limitations like double coincidence by acting as medium of exchange, store of value, and evolving from coins to digital forms.”
Best for 2-mark, 3-mark & 5-mark answers | Includes golden lines
Textbook Activities – Completely Solved
Let’s Explore (Page 231) – Farmer & Ox Story
Difficulties faced: 1. Finding a person who wants an ox 2. Multiple exchanges needed (ox → wheat → shoes → sweater → medicine) 3. Transporting heavy wheat bags 4. Storing leftover wheat (it can rot or be eaten by rats) 5. Deciding fair exchange ratio every time
Think About It (Page 232) – Types of difficulties
1. Double coincidence of wants 2. Lack of common measure of value 3. Problem of divisibility 4. Problem of portability 5. Problem of durability
Think About It (Page 233) – Double coincidence examples
Farmer wants shoes and shoemaker wants wheat → possible double coincidence Same for sweater and medicines → very rare in reality
Think About It (Page 234) – How money helps the farmer
Money helps because: → Sell ox once → get money → Buy anything, anytime, from anyone → Money is divisible, portable, durable and universally accepted → No need to store rotting wheat
Let’s Explore (Page 236) – Modern barter practices
Yes, seen in: • Junbeel Mela (Assam) • Old clothes ↔ steel utensils • Book swap clubs • Neighbours exchanging services (tuition ↔ cooking)
Think About It (Page 237) – Book ₹100, you have only ₹50
This shows money works as standard of deferred payment – you can pay ₹50 now and ₹50 later or borrow.
1. How does the barter system take place? Name any five commodities used.
Answer: Barter system is direct exchange of goods/services without money. Commodities used: cowrie shells, salt, tea leaves, tobacco, cattle, grains, cloth, Rai stones, Tajadero, Tevau feathers, etc. Golden Line: “Barter was the earliest form of exchange seen all over the world.”
2. What were the limitations of the barter system? (Most Important 5-mark)
Five Limitations (Remember this order): 1. Double coincidence of wants – both parties must want each other’s goods 2. Lack of common measure of value – difficult to decide fair exchange ratio 3. Problem of divisibility – cannot divide an ox or cow 4. Lack of portability – difficult to carry heavy goods 5. Lack of durability – perishable goods rot (wheat, fruits) Golden Line: “These limitations made large-scale trade almost impossible, leading to the invention of money.”
3. What are the salient features of ancient Indian coins?
→ Made of gold, silver, copper or alloys → Called kārṣhāpaṇas or paṇas → Had punched symbols called rūpas → Different motifs on obverse and reverse (Varaha, tiger, trees, deities, kings) → Issued and controlled by rulers
4. How has money transformed over time? (Important 5-mark)
Evolution of Money: 1. Commodity money → cowrie shells, cattle, salt 2. Metallic money → coins (600 BCE onwards) 3. Paper money → 18th century in India 4. Bank money → cheques, drafts 5. Electronic/Digital money → cards, net banking, UPI, QR codes Golden Line: “Money has moved from heavy → light → weightless (digital) over centuries.”
5. How did Indian coins become acceptable across countries in ancient times?
→ Coins of powerful rulers were trusted and accepted widely accepted → High gold/silver content → Evidence: Roman gold coins found in Tamil Nadu & Kerala → India had trade surplus → foreign coins flowed in
6. Arthashastra lines – What do they tell us?
→ 60 paṇas = annual salary → 1 paṇa ≈ 3 kg grain per day → shows value of paṇa → Fine of 100 paṇas for not helping neighbour → very high compared to salary → society valued helping others → promoted human values and community living
7. Write a short skit showing how cowrie shells became money
Scene: Village market Trader 1: I have rice but need cloth. Trader 2: I have cloth but need rice only next month! Villager: Let’s use cowrie shells! Everyone accepts them. Both agree → shells become common medium → money is born!
8. Name any five security features of Indian currency notes
Cash preferred because: tangible, no internet needed, trusted UPI preferred because: fast, convenient, safe, trackable, no change issue
40+ Extra Exam Booster Questions (Very Short, Short & Long)
Who said money is a link between present and future?
John Maynard Keynes
Giant stone money used in which island?
Yap Island (Micronesia)
Most important limitation of barter?
Double coincidence of wants
Ancient Indian coins were called?
Kārṣhāpaṇas or Paṇas
Symbols on ancient coins were called?
Rūpas
Chalukya coin showed which animal?
Varaha (Boar)
Chola coin emblem?
Tiger
₹ symbol designed by?
Udaya Kumar (IIT Bombay)
Paper money first used in which country?
China
Who issues currency notes in India today?
Reserve Bank of India (RBI)
Four functions of money (in order)?
Medium of exchange, Store of value, Common measure, Standard of deferred payment
Junbeel Mela is held in which state?
Assam
Roman coins found in which Indian state?
Tamil Nadu (Pudukkottai)
1 anna in 1947 could buy?
A dozen bananas
Modern form of money you see on fruit carts?
QR code / UPI
Golden 5-Mark Answers (Directly write in exam)
Q. Explain any five limitations of barter system. Why did money become necessary? Answer: The barter system had five major limitations: (i) double coincidence of wants, (ii) absence of common measure of value, (iii) indivisibility of certain goods, (iv) difficulty in storing wealth, and (v) lack of portability. Because of these problems, trade remained limited and inconvenient. To overcome them, a common medium that everyone accepted was needed — this led to the invention of money.
Q. Describe the evolution of money in India. Answer: Money in India evolved through many stages:
• Commodity money (cowrie shells, cattle, grains)
• Metallic money – punch-marked coins (kārṣhāpaṇas) from 6th century BCE
• Beautiful coins by Gupta, Chola, Chalukya kings with symbols
• Paper money introduced in late 18th century
• Today – plastic money, UPI, QR codes and digital wallets.
Thus money has become lighter, safer and more convenient over time.
Key Concepts – In-Depth Exploration (Chapter 11)
Core ideas explained with examples, common confusions, exam connections & golden lines – perfect for 3-mark & 5-mark answers.
Barter System
Concept: Direct exchange; no money.
Example: Goods for goods; ancient commodities.
Exam Golden Line: “Barter efficient for small needs but impractical for complex trades.”
Confusion: Not all exchanges fair without measure.
Limitations of Barter
Concept: Practical issues leading to money.
Example: Farmer's ox-wheat swaps.
Exam Trick: Always list 5 limitations.
Golden Line: “Double coincidence made barter rare and inefficient.”
Functions of Money
Concept: Solves barter problems.
Example: Store value unlike wheat.
Exam Golden Line: “Money as medium simplifies exchanges.”
Evolution of Money
Concept: From non-metallic to digital.
Example: Coins to UPI.
Exam Golden Line: “Technology drove money from tangible to intangible.”
Modern Money Forms
Concept: Digital transactions.
Example: QR scans, bank transfers.
Exam Golden Line: “UPI revolutionized payments in India.”
Surviving Barter
Concept: Coexists with money.
Example: Junbeel Mela.
Exam Tip: Cultural significance.
Exam Master Tips & Golden Lines
Most Important Concept: “Limitations Leading to Money”
Best 5-Mark Concept: “Functions & Evolution”
Mnemonic: “DCDPD for Limitations”
Golden Answer for 5 Marks:
“Barter's limitations like double coincidence and durability necessitated money, which functions as medium of exchange and evolved from coins to digital UPI.”
Historical & Social Insights – Evolution of Money
Deep historical role + present-day impact – perfect for 5-mark and 8-mark answers.
Historical Insights – Ancient to Modern
Pre-Money: Barter with commodities (shells, cattle).
Cultural: Pana variations in languages; coin motifs reflect heritage.
Modern Practices: Book swaps, clothes-utensils; recycling benefits.
Digital Shift: Convenience for vendors like fruit sellers.
Modern Connections – You See Today!
UPI/QR: Direct bank payments.
RBI Features: Security against counterfeiting.
Preferences: Cash vs digital (survey insights).
Global: Inspired from China, world trade.
Events: Special coins for occasions.
Important Figures & Events
Keynes: Money as present-future link.
Junbeel Mela: 15th century tribal fair.
Udaya Kumar: ₹ designer.
Roman Trade: Gold coins evidence.
Impact on Society
Simplified trade
Enabled growth
Reduced inequalities in exchange
Digital inclusion
Cultural preservation in barter fairs
Exam Quick Tips & Golden Lines
Best Historical Example: “Roman coins show ancient trade.”
Best Social Example: “Junbeel Mela promotes harmony.”
Best Modern Example: “UPI for digital payments.”
Golden Line for Long Answer:
“From ancient barter commodities to digital UPI, money's evolution integrated historical trade needs with social convenience, remaining essential for exchanges.”
Real-Life Examples – Money in Action
Actual applications, events and impacts today – perfect for 3-mark & 5-mark answers.
Barter Today
Junbeel Mela: Tribes exchange produce.
Book Clubs: Swap stories cost-free.
Clothes-Utensils: Recycle household items.
Local: Neighbors trade services.
Limitations in Practice
Double Coincidence: Hard to find mutual wants.
Divisibility: Can't split big items.
Storage: Food rots in barter.
Travel: Bulky goods impractical.
Functions Everyday
Medium: Buy groceries with notes.
Store: Save in bank for future.
Measure: Compare prices.
Deferred: Pay school fees later.
Evolution Examples
Coins: Ancient trade with Rome.
Paper: RBI notes with security.
Digital: Fruit vendor QR scans.
UPI: Instant transfers.
Global Parallels
Yap Stones: Giant rock money.
Tajadero: Copper knife money.
Tevau: Feather coils.
China: First paper money.
Security & Preferences
Features: Watermarks prevent fakes.
Cash: Tangible trust.
Digital: Convenience in shops.
Exam Quick Tips & Golden Lines
Always give specific examples: Junbeel for barter, UPI for digital.
Best Example for Limitations: “Farmer's ox for multiple items.”
Best Example for Evolution: “Roman coins in India.”
Golden Line for Answer:
“Money functions in daily life as medium (buying), store (savings), evolving to digital for ease like QR payments.”
