The term 'double coincidence ' of wants is usually associated with a?
Answer Details
The term "double coincidence of wants" is usually associated with a barter exchange mechanism.
Barter exchange is a system of trade where goods and services are directly exchanged for other goods and services without using money as an intermediary. In this system, two parties must agree to exchange goods or services that each party wants or needs. However, for this exchange to occur, both parties must have what the other wants or needs at the same time and place, which is known as the "double coincidence of wants."
For example, imagine a farmer who wants to trade his wheat for a cow from a rancher. The trade can only occur if the rancher wants the wheat and the farmer wants the cow at the same time and place. If the rancher does not want wheat or if the farmer wants a horse instead of a cow, the trade cannot occur. This requirement can make barter exchange difficult and inefficient, especially for large-scale transactions.
In contrast, monetary exchange mechanism uses money as a medium of exchange, which eliminates the need for the double coincidence of wants. In this system, goods and services are bought and sold using a universally accepted currency, which can be used to buy anything, anytime, anywhere. This makes trade more efficient and flexible, as individuals can buy and sell goods and services without the need for a direct trade with the double coincidence of wants.