ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the requirement of a double coincidence of wants.
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lowering the cost of exchanging goods over time.
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lowering the cost of exchange to those who would specialize.
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encouraging specialization and the division of labor.
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Detailed explanation-1: -Question 16 Barter system involves exchange of goods for goods. This exchange of goods for goods works well when there is double coincidence of wants. In absence of that, multitude of irrelevant transaction have to be undertaken leading to wastage of…
Detailed explanation-2: -When compared to exchange systems that rely on money, disadvantages of the barter system include: The requirement of a double coincidence of wants. easily standardized, making it easy to ascertain its value. it must deteriorate quickly.
Detailed explanation-3: -Other disadvantages of the barter system are inability to make deferred payments, lack of common measure value, difficulty in storage of goods, lack of double coincidence of wants.
Detailed explanation-4: -The Disadvantages of the Barter System include inefficiency of storing wealth for a longer duration, not feasible for large economies, difficulty to get the desired product in exchange, and many more. The Barter system is a traditional method of making transactions without the use of money.
Detailed explanation-5: -Lack of double coincidence exists in barter exchange. It refers to the situation where the mutual wants of the buyer and seller are less likely to be fulfilled simultaneously. If the buyer’s wants can be fulfilled by exchange but cannot provide what the seller wants, the exchange is unlikely to happen.