What are the advantages of barter? What are disadvantages of it?
Answers
Advantages
Some of the advantages of Barter system are:
It is a simple system free from the complex problems of the modern monetary system.
The problems of international trade, like foreign exchange crisis and adverse balance of payments, do not exist in the barter system.
Personal and natural resources are perfectly utilized to meet the requirements of the society without involving any wastage.
Disadvantages
Besides the above mentioned advantages, there are also certain disadvantages to the system. These include:
Absence of common measure value
Money plays the role of a measure of value of all goods in a monetary economy thus being helpful in measuring their values against each other. This role might be absent in a barter economy
Answer:
Step-by-step explanation:
Advantages Of Bartering
One advantage of bartering is flexibility. You can trade one related product for another – such as a laptop for a portable tablet – or two completely different items – like a television for a lawnmower. You can even save money on travel by trading homes, allowing friends to stay in your residence while you borrow their cottage or house for recreation or proximity.
You also have the option of bartering with and for services rather than material items. Instead, you may offer maintenance, construction or other services in exchange for material goods or other assistance.
Of course, barter offers the clear advantage of saving money. Not only do you get something you need or want, but neither party has to spend a cent.
Disadvantages Of Bartering
While bartering has immediate benefits, it can also cause serious complications. This is especially true if you can't guarantee the trustworthiness of your fellow trader. The other party may not have certification or any proof of legitimacy, and you don't have a warranty or consumer protection advocate when you barter. You may end up trading a good item or service in exchange for a defective or poor one. If this concerns you, limit your exchanges to friends and family.
Bartering also requires skill. You may overestimate the value of your desired item and underestimate yours. As a result, the other party could exploit you. To prevent this, focus on related items with similar value, such as one large appliance for another.