Exchange – Continued…

Indirect Exchange

When people exchange what they have for something that they intend to exchange for something else, we refer to that as indirect exchange. The good accepted in the first exchange has value to that individual solely for the purpose of a secondary exchange.

Indirect exchange solves some of the logistical problems and bottlenecks that arise from direct exchange, but it still creates some difficulties the people involved. Solving these difficulties opens the door for the concept of money.