What are the drawbacks of the barter system?

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Lack of double coincidence of wants

Lack of storing value

Lack of common measure of unit

All of the above

answer is D.

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Detailed Solution

The barter system is the system in which goods are exchanged with goods. The followings are the drawbacks of the barter system.
1)      Lack of double coincidences- In the barter system, a double coincidence of want is needed, which means one person has to sell and buy the same thing the other person wants. Here mutual agreement between two parties is necessary. For example, Ravi has a pair of shoes, and he wants to buy one kg of apples in exchange, so he has to find a person who wants to sell apples in exchange for one pair of shoes.
2)      Lack of storing value- In a barter system, there is a lack of storing value. For example, Ravi sold a pair of shoes and got one kg of bananas in exchange. Here, he cannot store bananas for a long period.
3)      Lack of common measure of value- In the barter system, there is no common unit to measure the goods.

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