What is exchange?

Exchange is when you trade one thing for another, just like trading toys at recess.

Imagine you have a red ball, and your friend has a blue car. You both want what the other has. So you exchange, you give each other what you have. Now you both have something new!

In real life, people exchange things like money for goods or services. For example, when you go to a store and buy candy with your allowance, you're doing an exchange: your money goes to the shopkeeper, and they give you candy.

People do this because they want something they don’t have, maybe something better or more useful. Like if you trade your red ball for a blue car, you might think the car is cooler. Your friend might think the ball is more fun to play with. So both of you feel happy with the exchange!