Question

Which of the following factors causes the barter system to be inefficient?

• A. The cost associated with information search is too low.
• B. Its cost of transaction is too low.
• C. It requires a double coincidence of wants.
• D. It requires high liquidity.

Answer 1

The correct option is C It requires a double coincidence of wants.

Double coincidence of wants refers to the fact that in barter system exchange can take place only when both the parties agree to all conditions .