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Question
State any two demerits of the Barter system of exchange?
Solution
The two demerits of Barter system of exchange are as follows:
- Need for double coincidence of wants: The barter form of exchange can take place only when the two parties need each other’s goods in the form of exchange.
- Difficulty in storing value: In the barter system, it is very difficult and inconvenient to store wealth for future use goods like food grains, cloth, cattle, sheep, etc.
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RELATED QUESTIONS
What is meant by the double coincidence of wants? How does money overcome this problem?
How does money solve the problem of lack a common measure of value that existed under the barter system?
Briefly explain the following with reference to the barter system of exchange.
(i) Lack of common measure of value.
(ii) Lack of standard of deferred payments.
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The system of exchanging things is known as _______.
Explanation of Keyword: Barter System
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The system of exchanging services and goods is known as the ________ system.
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Name the system in which the double coincidence of wants is an essential feature.
Explain the meaning of barter exchange by giving an example.
