Question

Assertion (A): Under barter system, it is difficult to store value.

Reason (R): There is lack of double coincidence in the wants of buyers and sellers in barter exchange.

Options

• Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true but Reason (R) is false.

• Assertion (A) is false but Reason (R) is true.

Answer 1

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Explanation:

The Assertion is true because storing value is difficult when wealth is held in perishable or bulky commodities like wheat or livestock. The reason is also true: matching two traders with exactly overlapping mutual wants is extremely rare. However, the Reason does not to explain the Assertion; the difficulty of storing goods is entirely unrelated to the difficulty of finding a trading partner.