Question

Explain "difficulty in storing wealth" problem faced in the barter system of exchange.

Answer 1

Individuals tend to store a part of their wealth or earnings as savings to be used for future needs or as an investment. However, it is very difficult to store many types of commodities. For example, perishable goods such as grains, milk, meat, etc could not be stored to exchange goods in future. In addition to this, transportation of goods from one place to another was tedious and also difficult. Therefore, the transfer of value and wealth storage was one of the major difficulties in the Barter system.