Choose the given statement that is true/false.

Barter system is suitable for today's economy.

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True

False

answer is B.

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Detailed Solution

The above statement is false.
The barter system is a system where people exchange one good for another. This system prevailed millions of years ago when there was no concept of money and banks. This system was also called "Commodity for Commodity." But in today's world, this system will fail and won't work appropriately. The barter system is beneficial for an economy where people live close to each other but where the economy is very poor or backward. It is useful when goods and services are produced in small quantities, and people do not require many goods for survival and existence. But in today's world, money is needed as so many goods are produced worldwide. Everything is far and distant, and people are willing to spend more and have a more luxurious lifestyle.
The correct statement is barter system is not suitable for today's economy.

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