Which among the following is an essential feature of barter system?
A
A person holding money can easily exchange any commodity
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B
It is based on double coincidence of wants
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C
It is generally accepted as medium of exchange of goods with money
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D
It acts as a measure and store of value
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Solution
The correct option is B It is based on double coincidence of wants Barter
system goods can be exchanged against good and there is no involvement of money
in such system. Barter system is old & out dated system and currently there
is no effective existence of this system. 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.
It generally flourishes among uncivilized and backward communities.
Barter system is possible where the area of exchange is limited.
It is possible only if the wants of members of a community are very limited.