explain the inconvenience caused by barter exchange?
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The barter system is an inconvenient method in the following ways;
1) The problem of storing wealth; suppose you brought tomato in exchange of cotton or anything, itwill occupy more space and it is perishable, you can't keep it for long period of time.
2)Lack of double coincidence of wants ;It requires both buyer and seller to agree on each and every termsand conditions to make a deal successful.
3) Absence of common measure of value;It is obvious you will not be eagerto sell 2 metre of silk for 2kg of onion.
1) The problem of storing wealth; suppose you brought tomato in exchange of cotton or anything, itwill occupy more space and it is perishable, you can't keep it for long period of time.
2)Lack of double coincidence of wants ;It requires both buyer and seller to agree on each and every termsand conditions to make a deal successful.
3) Absence of common measure of value;It is obvious you will not be eagerto sell 2 metre of silk for 2kg of onion.
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barter system is not convenient because for example if shoemaker wants to sell his shoes and buy rice.then it seems very difficult to find rice growing farmer in search of shoe. this was major problem in barter system
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