A barter economy is an economic system in which goods and services are exchanged directly without the use of money. In a barter economy, individuals and businesses trade goods and services with each other based on their needs and wants. For example, a farmer may exchange a bushel of wheat with a baker in exchange for bread. The value of the goods and services exchanged is determined by the individuals involved in the transaction. Barter economies were common in ancient times and are still used in some parts of the world today. However, most modern economies use a monetary system to facilitate trade and commerce.