What is the most essential feature of barter system?
Why is money called a medium of exchange?
Answers
Answer:
The essential feature of barter system is accepted as the medium of exchange of goods with money. In barter system the business is done through the exchange of goods. In short, in this system the goods are exchanged without the use of money.
Answer:
1.
Features of barter system are as follow: Barter system is direct exchange of goods and services. It requires the double coincidence of wants. Barter system eliminates the use of money.
2.
Money helps to facilitate trade because people in the economy generally recognize it as valuable. Money is called medium of exchange because money is a widely accepted token that can be used for exchange of any good or service. In old days, barter system was used as medium of exchange and later it was gold.