ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In times of monetary crisis or collapse, a barter system is often established as a means to continue the trading of goods and services and to keep a country functioning. This may occur if physical money is simply not available, or if a country sees hyperinflation or a deflationary spiral.

Detailed explanation-2: -Because barter is based on reciprocity, it requires a mutual coincidence of wants between traders. This requirement complicates barter, but in a sufficiently large system traders can be found to supply most wants. According to proponents, the mutuality fosters a sense of connectedness and community among traders.

Detailed explanation-3: -In trade, barter (derived from baretor) is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money.

Detailed explanation-4: -These ancient people utilized the bartering system to get the food, weapons, and spices they needed. Because of salt’s great value, Roman soldiers bartered their services for the empire in exchange for salt. In Colonial America, the colonists used bartering to get the goods and services they needed.

Detailed explanation-5: -Bartering benefits all because an individual or a business get the items or services they require. Businesses with limited cash flow can make use of the barter system to get whatever they need. Companies can also barter a service in exchange for a product.