#Economics #bartersystem #portability

• Barter System

  • Barter system is a way of exchanging good or service for another good or service

  • This process does not contain proper values as the exchange depends upon the want or need of a person and not demand

    
    

• Problems With Barter System

  • One of the key problem with barter system is the need of double coincidence of wants, If a person wants chicken and then there is one guy trading 4 chickens for a sheep, as 2 people are engaged in a trade there is no idea of demand and it all depends upon the want and need of the person

  • The second problem of barter system is divisibility, half a sheep or 2/3 of chicken can't be precised as the values are equivalent to such parts of a good

  • The third problem talks about portability, compare the portability of a sheep or fish with that of paper money, it talks about which is easy to carry and trade

The functions Of Central Bank

• The central bank of a country is the monetary authority that oversees and manages the nation’s money supply and banking system.

• Examples of central banks include the European Central Bank (for the Eurozone countries), the USA’s Federal Reserve, the Bank of England, the People’s Bank of China and the Reserve Bank of India. These banks are responsible for overseeing the monetary policies