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Exam_3_notes - TheBarterSystem .(you . .Itis

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The Barter System The  oldest form of economy we know of.   It is based on exchange of goods (you  have cotton and we have salt so lets exchange). For simpler societies the barter  system tended to be pretty sufficient but it has some major drawbacks also. It is  limited also by how much a person can carry around.  The system is limited by  what can be accumulated and what can be stored (some goods can not be  stored so you have to trade them off in a hurry).   Money Economies       When societies got more complex we saw money economies where we  developed some system where things can be exchanged for a wide variety of  things. As long as there was some systematic way of every one agreeing on the  system (I agree and you except that a dollar is a dollar). You could use the  money to buy whatever you wanted.  Command Economies       These are economies which the government tries to regulate most aspects of the  economy  Feudalism o An agrarian system based on large scale agriculture. It was based on  how much land nobility had and how much land they could accumulate.  These wealthy land owners pretty much owned all the needs for  production. The majority of people were surfs (peasants bound to the land  by law to work the land for the landlord). They would usually have the  right to keep some of what they raised. Some of what they produce has to  go to the landlord and they can’t leave. This developed and became  common in Europe. It still exists in various forms in parts of the world  today. In the early ages the system was based on barter more than  money (people couldn’t get their hands on money easily). With an  increase in trade money became more available. And the surfs could pay  the landlords instead of working. This rise in money leads to the decline in  feudal system.  Mercantilism o Under this system individuals (or privately owned businesses) took care  of the production of goods, but the distribution of goods was regulated by  the government. We see in Europe not only the rise of states but the rise  of monarchies. They would make their money to import and export taxes. 
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Any flow of goods in to or out of the country they had to pay taxes.  European powers began to develop oversea colonies. Any goods  produced in a colony had to be sent back to the other colony which  caused them to have to pay a tax. Monarchs were very much important  because it was up to parliament to pass laws about internal taxes (and  they would get the revenue).  
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