Here are some of them:
There are some very serious problems with Barter;
(1) You have to look for people who want to exchange what you have for what you want,
(2) Next they may not be willing to exchange the volume you want,
(3) Two people may not have the same valuation of a commodity.
1. lack of double coincidence of wants
2. lack of common measure of value
3. lack of store of value
4. indivisibility of goods
5. lack of deferred payment
6. difficulty in transfer of wealth
A barter system is difficult and often impractical for several reasons:
1) A lack of the "double coincidence of wants" - one party must be seeking the exact item or service that the other party has, at the same time it is available.
2) An absence of a common measure of value or medium of exchange - there is no comparative value scale as determined by the supply or the demand
3) Indivisibility of goods - some goods such as livestock or manufactured items cannot easily be divided to provide fractional bartering items
4) Normally requires the direct contact between producer and the consumer, or their agents, at a specific time and place.
5) A lack of surplus stocks, such that increased demand cannot always be met.
6) Difficulties in transportation, or transfer of wealth (property) from one owner to another.
7) There is no store of value separate from masses of disparate goods.
8) There is insufficient provision for lending or borrowing.
9) The collection of transfer taxes is cumbersome, difficult, or impossible.
"Hello, Ivan. How are things in Moscow? Are you still selling tractors?"
"Da. How many do you want?"
"Fifteen. I can trade them to local farmers for food."
"How do I get them to you?"
"By boat."
"Nyet. The boat captain doesn't want a tractor."
"Would he take vodka?"
"Da, he would, but I don't have vodka."
"Can you trade a tractor for vodka?"
"Da, I know a man in Kiev,who might want a tractor. But one tractor is worth a lot of vodka. How do I get it back from Kiev?"
"You trade vodka for the use of a truck."
"I'd still have more vodka than I can use."
"Then store it"
"The only man I know who rents warehouses doesn't drink. What are you going to trade for these 15 tractors anyway?"
"An airplane."
"I don't want an airplane. And anyway, it's not enough. I want a beach property near Brisbane and two crates of single malt scotch."
Compare this.
"Hello, Ivan. How are things in Moscow? I'm looking for 15 tractors."
"I can give them to you for 8.5 million pounds sterling, transport included."
"I'll offer 7 million and I'll pay the transport."
"Done"
These are the main difficulties of barter system:
problems of bartar trade
exchange rate
wast of time
Barter is the trading of goods without the use of money.
Our class reenacted a silent barter scene.
barter system was invented by Cris Dolan in 1880s in England.
Barter system
they had a barter system. they didn't have money, just trade goods,
Barter is the trading of goods without the use of money.
what is the difficultes of barter system in world economy
Native Americans relied on a barter system. This was a system in which
Our class reenacted a silent barter scene.
barter system was invented by Cris Dolan in 1880s in England.
Barter system
In barter economy, commodities were exchanged in the market. It was before the evolution of currency system that barter economy existed. Even today, in remote rural areas of India, the barter system still exists.
they had a barter system. they didn't have money, just trade goods,
Barter
A trade, an exchange, or barter. An economic system which operates without money is called a barter system.
money
No. Barter System was one of the ancient ways of exchange of goods and services. Nowadays cash and currency has replaced the barter system. People usually pay for goods and services in money.