Question

8. Aristotle’s theory of exchange is based on a. the influence of a large number of buyers and sellers. b. the use of gold as a medium of exchange. c. reciprocity between the traders. d. all of the above. e. none of the above.

Answer 1

e. none of the above.

Aristotle conceptualized the theory of equal value in exchange . He conceived retail trading and wealth creation . But most importantly he believed that fair exchange requires equal value in exchange . And in order to be fair and equivalent , there must be a common base of measurement of value . Hence , the creation of money came into picture . In his theory of exchange , he has identified money as a medium of exchange , store of value and unit of measure .