The system of exchange where goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money is known as the Barter System. This system existed in olden times. In the olden times, people lived a simple village life and had less needs. They carried out agricultural exchange and exchange of goods and service which was sufficient for their livelihood.
A farmer cultivating wheat would keep a part of wheat sufficient for his family and would exchange the remaining to get rice, clothes, shoes or other items of his need. Similarly the shoe-maker would get clothes and food by exchanging the shoes he made. Teachers used to get food in exchange for knowledge and the artists would be patronized for their entertaining art.