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Five conditions necessary for exchange include the following: First, there must be at least two parties involved, each possessing something of value. Second, both parties must be willing to trade and have the capacity to make the exchange. Third, the goods or services being exchanged must be desired by both parties. Fourth, there should be a clear understanding of the terms of the exchange, including the value of what is being traded. Finally, the exchange must occur in a suitable environment where both parties can complete the transaction effectively.

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