Q. 155.0( 2 Votes )

What are the difficulties of the Barter system?

Answer :

Barter system was used as a mode of exchange before the advent of money in which a good is transferred for another good. It was done because no goods had the money or monetary value, therefore, the goods had to be exchanged with each other.

Some of the difficulties with the barter system are as below:


Double coincidence of wants: One of the most difficulty of barter system is a double coincidence of wants in which the buyer and seller should agree to sell each other’s commodity in exchange even if they are not interested


Difficulty in finding buyer and seller: It is very difficult to find the buyer who is need of commodity which the seller wants to sell.


Store of value: Barter system lacks the function of store of value because the sold commodities cannot be saved for future use whereas money can be easily saved as a deposit.


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