drawbacks of barter system
Answers
Explanation:
Barter system is exchange of goods between two parties at times when there was no money.
The major drawback is lesser chance of double coincidence i.e. the person that want product from us may not give us product of our need or vice versa. This means that the need of both parties may not always be successful in Barter system. Also the correct value could also be not provide for one's good.
Answer:
Barter system is a system in which goods are exchanged for goods .
Drawbacks :
1) Double coincidence of wants : Double coincidence of wants implies that the two individuals are in possession of such goods which they are willing to exchange for the satisfaction of their wants .
2) lack of purchasing power accumulation :
Capital formation is not possible in the absence of purchasing power accumulation
3) Lack of price gauge : The biggest difficulty is to determine the value of the commodity in the barter system . It lacks a well known value .
4 ) Difficulty in commodity division : In the barter system there are difficulties in the division of goods which causes difficulty in exchange