Barter and money

Long ago, people did not use money. They used the barter system: they exchanged goods and services with each other.

Your book, Our Wondrous World (Chapter 2), gives an example. A farmer grows wheat, and a shepherd keeps animals that give milk. The farmer could give some wheat to the shepherd and get milk in return.

But barter was not always easy. First, you had to find the right trade partner: someone who had what you wanted, and who also wanted what you had. Second, you had to agree on the right exchange value: how much wheat is fair for how much milk?

To make exchanges simpler, money was invented. Now the farmer can sell wheat for money, and use that money to buy milk from anyone.