The development of trade networks on the Mediterranean Sea had benefits and drawbacks. The benefits were that people could sell their surplus goods and become wealthy. For example, Greece did not have much farmland, but ancient Egyptians grew a lot of grain. The Egyptians sold their extra grain to the Greeks. In turn, the Egyptians could obtain goods they needed. For example, Egyptians needed timber to build boats. Egyptians could obtain timber from Greece.
The rise in trade raised some problems. Early trade depended on bartering. Bartering is the exchange of goods for other goods. For example, Egyptians could barter grain with Greeks in return for wood. But what if the Greeks did not need Egyptian grain at that time, but wanted Phoenician glass? The Egyptians would first have to trade the grain for the glass. Then, they could trade the glass for the wood. Bartering can become complicated very quickly!
This problem led to the creation of monetary exchange. Monetary exchange is the use of currency to trade, or buy, goods. Currency is a standard item used to represent a value. A common example is a coin or paper money. People could now use currency to buy what they needed.
How did the development of monetary exchange improve on the old barter system of trade?
Monetary exchange made trade less complicated.
Bartering led to the development of trade networks.
Monetary exchange let people trade goods for other goods.
Bartering allowed people to trade with others who had similar goods.