Explain the inconvenience caused by barter system
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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, it will 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 terms and conditions to make a deal successful.
3) Absence of common measure of value;
It is obvious you will not be eager to 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, it will 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 terms and conditions to make a deal successful.
3) Absence of common measure of value;
It is obvious you will not be eager to sell 2 metre of silk for 2kg of onion.
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