explain the problems of batar system
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In barter system, both parties have to agree to sell and buy
each other’s commodities known as double coincidence of wants. What a
person desires to sell is exactly what the other wishes to buy. In a barter
system where goods are directly exchanged without the use of money, double
coincidence of wants is an essential feature. For example:-
Take the case of a shoe manufacturer. He wants to sell shoes
in the market and buy wheat. The shoe manufacturer has to first find for a
wheat growing farmer who not only wants to sell wheat also wants to buy the
shoes in exchange. But how easy it would be, for the shoe manufacturer, if only
he sold his shoes for money.
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Answer:
Barter system had many difficulties which were faced by the people like lack of double coincidence of wants, lack of a common unit of value, difficulty of future payments or contractual payments and difficulty of storage of value and transfer of value.
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