simple to use, no concentration of power, no overexploitation of natural resources, etc. On the other hand, the disadvantages of the Barter system include the Indivisibility of certain products, lack of double coincidence of wants, inefficiency in the storage of products, etc.
Double coincidence of wants means, a person has to find the right person who is willing to not only purchase his goods but also has the goods to sell which is required.
One cannot carry forward the wealth in the barter system, an example would be one cannot store surplus rice for long periods of time as rice is a perishable item.
Merits of Barter System:
The system is simple, there are no complexities involved unlike monetary system, natural resources will not be overexploited, power will not be concentrated in some circles, there won’t be problems of balance of payments crisis, foreign exchange crisis, or other complex problems of international trade.
Money evaluates every commodity and service with a convincing value.
Answers & Comments
Answer:
simple to use, no concentration of power, no overexploitation of natural resources, etc. On the other hand, the disadvantages of the Barter system include the Indivisibility of certain products, lack of double coincidence of wants, inefficiency in the storage of products, etc.
Demerits of Barter system:
Merits of Barter System:
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