Question

State any two demerits of the Barter system of exchange?

Answer 1

The two demerits of Barter system of exchange are as follows:

1. Need for double coincidence of wants: The barter form of exchange can take place only when the two parties need each other’s goods in the form of exchange.
2. Difficulty in storing value: In the barter system, it is very difficult and inconvenient to store wealth for future use goods like food grains, cloth, cattle, sheep, etc.