Question

How does the use of money help in overcoming the drawbacks of barter system?

Answer 1

Answer:

Money overcomes the problem of barter system by replacing the C-C economy with monetary economy (where 'C stands for commodity).

(i) In the barter system, there was a problem of double coincidence of wants. It was very difficult to match the expectations of two different individuals. Thus, money was invented to overcome the problem of double . coincidence of wants.

(ii) When there was no money, it was difficult to give common unit of value to goods or commodities, but when money was evolved, it gave a common unit of value to every goods and services.

(iii) Money facilitates the contractual future payments which were impossible at the time of barter system.

Answer 2

for an example, person A and peson B person wants cold drink and person A have cold drink and peson B have goggles but person A dose not want goggles he want to buy a dress .

..................... according to this problem people make medium of exchange ..... mony