Question

What is Barter system? What are its drawbacks?

Answer 1

Barter system of exchange is a system in which goods are exchanged for goods.

*It’ Drawbacks are**:

1. Lack of double coincidence of wants.

2. Lack of divisibility.

3. Difficulty in storing wealth.

4. Absence of common measure of value.

5. Lack of standard of deferred payment.