Question

How money has solved one problem of the barter system?​

Answer 1

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.

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Answer 2

Answer;

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

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