Question

Explain any three drawbacks of barter system

Answer 1

Dear Student,
Answer to your question is as follows :

DRAWBACKS OF BARTER SYSTEM
Double Coincidence of Wants.
A person holding money can easily exchange it for any commodity or service he or she might want.
But in Barter System, both parties have to agree to sell or buy each others commodities.
Indivisibility of certain Goods.
If a person wants to buy a certain amount of another's goods, but only has payment for one indivisible unit of another good which is worth more than what the person wants to obtain, a barter transaction cannot occur.
Lack of common measure of value.
Money plays an important role in measure of value of all goods, so their values can be measured against each other, which was absent in barter system.

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