Question

Explain issue of ‘double coincidence of wants’ and mutual adjustment of wants.

Answer 1

• Double coincidence of wants and mutual adjustment of wants refers to events where in two traders who wish to trade coincidentally need the item the other trader has and so the items they both have get mutually adjusted as barter.
• The Barter system assumes ‘coincidence of wants’ as a continuous process. This coincidence may not hold true always and the traders willing to exchange may not be in need of item that the other trader would like to exchange.
• For example, those who had rice to exchange for wheat did not need wheat but clothes for the barter. While on the other hand the one who had clothes did not want rice but wanted oil in exchange of clothes.