Question

Since its independence in the 1960s, Sioni Island has been practicing barter trade. However, in 2019, the Minister of Finance in the country argued for introduction of money, on grounds of development. Following discussions in class, examine how the introduction of money will lead to economic development in the country.

Answer 1

This is a systemof exchang in which directly exchange goods or services on behalf of other goods or services and no use of money as a medium of exchange.

Advantage: simple to do trade , it reduce the concentration of economic power, inflation fear was limited etc.

There are some disadvantage associated with it:

• . Lack of Double Coincidence of Wants which both the persons are agree with
• Lack of a Common Measure of Value
• It's very hard or tough to Store Value of goods and services
• Making Deferred Or delayed Payments also tougher or difficult.

Money as mediums of exchange, as a store of value, and as a unit of account. Medium of exchange., it will replace all transactions conducted by barter, remove problem of double coincidence and deferred payment also possible.