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Aryan · 2024-11-19T15:58:37.624Z

• Barter System -: Barter system is a way of exchanging goods and service, instead of purchasing goods or service through cash and coins. Problems Of Barter System • Barter system does not have proper values, it all depends on a persons want • Second problem of barter system would be that some goods are be valued at fractions, example - 1/4th of a chicken is a sheep • Third problem of barter system would be the portability, it cannot be easily carried Currency Properties • Fungibility: Money must be interchangeable, meaning that one unit of money is the same as any other unit of money of the same denomination. For example, one dollar bill is the same as any other dollar bill. • Durability: Money must be able to withstand wear and tear and last for a reasonable amount of time. • Portability: Money must be easy to carry and transport. • Recognizability: Money must be easily identifiable and distinguishable from other forms of money. • Stability: The value of money should be relatively stable over time. This means that the purchasing power of money should not fluctuate too much.

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Aryan

Nov 19

Barter System

in Aryan

Barter System -: Barter system is a way of exchanging goods and service, instead of purchasing goods or service through cash and coins.

Problems Of Barter System

Barter system does not have proper values, it all depends on a persons want
Second problem of barter system would be that some goods are be valued at fractions, example - 1/4th of a chicken is a sheep
Third problem of barter system would be the portability, it cannot be easily carried

Currency Properties

Fungibility: Money must be interchangeable, meaning that one unit of money is the same as any other unit of money of the same denomination. For example, one dollar bill is the same as any other dollar bill.
Durability: Money must be able to withstand wear and tear and last for a reasonable amount of time.
Portability: Money must be easy to carry and transport.
Recognizability: Money must be easily identifiable and distinguishable from other forms of money.
Stability: The value of money should be relatively stable over time. This means that the purchasing power of money should not fluctuate too much.

2 comments

Comments (2)

indu marath

Nov 25

How does the barter system work in practice, and what are its key principles?
What are the advantages and disadvantages of using the barter system?
How do modern barter exchanges operate, and what role do they play in today's economy?
What are some examples of goods and services that are commonly bartered?
How does the lack of a common measure of value affect transactions in a barter system?
What challenges do individuals and businesses face when using the barter system?

Aryan

Nov 28

Replying to

The barter system works by directly exchanging goods or services without money, relying on both parties agreeing on value. It operates on the principle of mutual agreement and requires a double coincidence of wants, meaning each person must have something the other desires.
The barter system is simple and allows people to trade without needing money, making it useful in cash shortages or unstable economies. However, it requires matching needs, which can be difficult, and lacks a standard measure of value
Modern barter exchanges function by providing platforms where businesses trade goods and services using credits instead of money. Participants earn credits they can spend within the network, removing the need for direct matching of wants.
Examples of commonly bartered items include food, clothing, and tools, while services such as repairs, education, and consulting are also frequently exchanged.
Without a common measure of value, determining fair trades becomes difficult, leading to potential disagreements or inefficiencies in transactions.
The barter system faces challenges like the difficulty of finding matching needs, unequal value perceptions, and logistical issues in large-scale or distant trades.