Question

Describe “Barter” and its difficulties.

Answer 1

Answer :-

Barter :-

Barter is defined as the exchange of goods without involving money.The direct exchange of one set of goods or services for another.

Barter system is a system of exchange in which goods or services are traded directly for other goods or services.

The situation such as to get items you are in need of and to give others in need, Barter can be used.

Problems /Difficulties with Barter system :-

(1). A double coincident of wants:-

This is when a person not only had to find someone who wanted his own goods but had to find someone that had what he wanted.

(2). The exchange rate:-

Traders had to agree on the quantities of the goods.

(3). Divisibility of goods:-

Some rates of exchange did not make it possible to trade because some goods could not be split into smaller parts.

(4). Storage of wealth:-

Goods could not be kept for future use.