Which among the following is an essential feature of the barter system?

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A person holding money can easily exchange any commodity.

It is based on a double coincidence of wants.

It is generally accepted as a medium of exchange of goods with money.

It acts as a measure and store of value.

answer is B.

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Detailed Solution

an essential feature of the barter system is based on a double coincidence of wants.
A barter system is the direct exchange of goods with goods without any use of money. It is used in the earlier period majorly. In a barter system, both parties agree to exchange each other’s goods. For instance, farmers are exchanging wheat for milk and vice versa. In this situation, the farmer and the person who sells milk are both in need of each other’s products. An instance of a double coincidence of wants is this. The major drawback of this system is the exchange is not possible without the double coincidence of wants. Thus, it was later eliminated by the use of money, which is widely accepted.

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