What are the drawbacks of Barter system ?

1.	What are the drawbacks of Barter system ?
Answer» The drawback of barter system are : 1) Absence of a common unit of measurement – There was no single unit of measuring the value of different goods as different countries were using different things as money. 2. Lack of double coincidence of wants – There is no guarantee that both the parties (buyers and sellers) will be agreed to exchange their goods at a time. 3. Problem of future payments – There was no single unit to engage in contracts involving future payments. 4. Storage and transfer problem – There was no general method of saving purchasing power. Storage may need more cost or high depreciation. Transferring immovable goods was also impossible.

Answer»

The drawback of barter system are :

1) Absence of a common unit of measurement – There was no single unit of measuring the value of different goods as different countries were using different things as money.

2. Lack of double coincidence of wants – There is no guarantee that both the parties (buyers and sellers) will be agreed to exchange their goods at a time.

3. Problem of future payments – There was no single unit to engage in contracts involving future payments.

4. Storage and transfer problem – There was no general method of saving purchasing power. Storage may need more cost or high depreciation. Transferring immovable goods was also impossible.

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