Question

Which among the following is an essential feature of barter system?

• A. A person holding money can easily exchange any commodity
• B. It is based on double coincidence of wants
• C. It is generally accepted as medium of exchange of goods with money
• D. It acts as a measure and store of value

Answer 1

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.