Choose the given statement is true/false:

The barter system can be used in the modern economy.

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True

False

answer is B.

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Detailed Solution

The given statement is false.
The barter system cannot be used in the modern economy because the exchange of goods in daily life is no longer a viable option for trade in today’s economy. The merits of the barter system are the lack of double coincidence of wants in real life. Some other disadvantages of the barter system include a lack of a standard measure of value, as there is no uniform value attached to a certain quantity of goods. The third disadvantage is the indivisibility of certain goods, in which interest is either sold or unsold and cannot be sold in parts. In this scenario, it becomes difficult to find a buyer who offers the seller the exact value of the sound, such that the whole good gets sold without dividing it, which becomes problematic in the modern economy.
The correct statement will be the barter system can not be used in the modern economy.

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