Question

Describe “Barter” and its difficulties.

Answer 1

Barter system in simple terms we can say that exchange method in old times

This is been used for a long time even the centuries before when the money was discovered

People exchange goods and services with one another

For example any person can have a bag of rice will exchange it with the service of haircut etc

The bartering history was estimated around 6000 BC

Many goods excahngedfor food spices weapons etc

Some of the drawbacks of this system are-

1. Lack of specialisation of goods or we can say that high specialisation is very difficult in this system
2. Difficulties are also in making deferred payments

• for example it is difficult to make payments in the future

3.Difficulty in storing value

4.Indivisibility of this certain type of goods or services