Question

How does money overcome the problem of barter system?

Answer 1

In a bartering system, the only way to obtain other goods is to trade your own goods for those you need. This becomes a problem if your good is not desirable to the person with whom you wish to barter or if your good is intangible, such as labor, leadership, or more service-oriented. Money is acceptable to all, so there is not an issue of each person wanting what good you have to offer, and those whose work involves the intangible can still participate.