Q25 of 141 Page 459

Explain the inconvenience caused by barter exchange.

Exchange of goods against goods is termed as Barter System.


Limitations of the barter system:


1. This system is time-consuming due to the presence of double coincidence of wants.


2. There is no fixed or standard value for the goods and services used in this system.


3. It is difficult to store goods/commodities used in this system.


4. Living goods are indivisible.


Hence, we see that the barter system poses a real threat to convenience and ease of transaction of goods.


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