What are the problems with the Barter System?

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Lack of double coincidence of wants

Lack of common measure of value

Difficulty in storage

All of the above

answer is D.

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Detailed Solution

The problems with the barter system are a Lack of double coincidence of wants, Lack of common measure of value and Difficulty.
1)      Lack of double coincidence of wants: In the barter system, both parties must buy and sell each other’s commodities. A farmer can only purchase a good from a seller willing to purchase what the farmer offers.
2)      Lack of a single measure of value: The barter system has no single measure of value. For example, 1 kg of wheat is equivalent to a pair of shoes, but a pair of shoes is valued the same as ten pairs of socks.
3)      Difficulty in Storage: In the barter system, sometimes perishable items were used as the medium of exchange. Food items like tomatoes and grains were difficult to store for a long time.

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