NCERT Class 10 Economics — Chapter 3: Money and Credit

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What is the 'double coincidence of wants'?

Official previous-year question

Verified 1 Aug 2026.

Options

AWhen what a person desires to sell is exactly what the other wishes to buy.
BWhen two people want the same commodity which is in short supply.
CWhen a buyer wants to buy two different goods at the same time.
DWhen a lender and a borrower agree on the same interest rate.

Did you get this right?

Solution

The correct option is When what a person desires to sell is exactly what the other wishes to buy..

Explanation

The concept of 'double coincidence of wants' is the foundational prerequisite for a Barter System, where goods are exchanged directly for other goods without the use of money as an intermediary.

Detailed Analysis

Definition: It describes a situation where two economic agents possess goods that the other desires. For a transaction to occur, the wants of both the buyer and the seller must coincide simultaneously.
Mechanism: In a barter economy, if an individual wants to exchange a specific commodity (e.g., shoes) for another (e.g., wheat), they must find a counterparty who not only possesses wheat but also specifically desires shoes.
Significance: This requirement creates significant transaction costs and inefficiencies, as finding such a specific match is difficult. The difficulty of achieving a double coincidence of wants led to the evolution of money, which acts as a common medium of exchange and separates the act of purchase from the act of sale.

Key Takeaway:
The 'double coincidence of wants' is the primary limitation of the barter system, requiring that what a person desires to sell is exactly what the other wishes to buy.

Your note

More from Chapter 3: Money and Credit

Consider the following statements regarding the impact of high cost of borrowing: 1. A larger part of the earnings of the borrowers is used to repay the loan. 2. The repayment amount is always less than the income of the borrower. 3. It may discourage people from starting enterprises due to the debt burden. Which of the statements given above is/are correct?

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Consider the following statements regarding the 'Cheque' facility: 1. The payee instructs the bank to withdraw money from the payer's account. 2. It allows for the direct settlement of payments without the use of cash. 3. Cheques are a form of currency issued by the RBI. Which of the statements given above is/are correct?

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With reference to the credit needs in rural areas, consider the following statements: 1. The main demand for credit is for crop production. 2. There is no time gap between buying inputs and selling the crop. 3. Repayment of the loan is crucially dependent on the income from farming. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the 'Krishak Cooperative': 1. It does not accept deposits from its members. 2. It uses deposits as collateral to obtain a large loan from the bank. 3. It provides loans for various purposes including house construction. Which of the statements given above is/are correct?

medium

Consider the following statements regarding the supervision of credit activities in India: 1. The World Bank supervises the functioning of formal sources of loans. 2. There is no organisation that supervises the credit activities of lenders in the informal sector. 3. Banks are not required to share any lending information with the RBI. Which of the statements given above is/are correct?

medium

Keep practising Chapter 3: Money and Credit

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The correct option is When what a person desires to sell is exactly what the other wishes to buy..

Explanation

The concept of 'double coincidence of wants' is the foundational prerequisite for a Barter System, where goods are exchanged directly for other goods without the use of money as an intermediary.

Detailed Analysis

Definition: It describes a situation where two economic agents possess goods that the other desires. For a transaction to occur, the wants of both the buyer and the seller must coincide simultaneously.
Mechanism: In a barter economy, if an individual wants to exchange a specific commodity (e.g., shoes) for another (e.g., wheat), they must find a counterparty who not only possesses wheat but also specifically desires shoes.
Significance: This requirement creates significant transaction costs and inefficiencies, as finding such a specific match is difficult. The difficulty of achieving a double coincidence of wants led to the evolution of money, which acts as a common medium of exchange and separates the act of purchase from the act of sale.

Key Takeaway:
The 'double coincidence of wants' is the primary limitation of the barter system, requiring that what a person desires to sell is exactly what the other wishes to buy.