It's much like using cash, but the barter exchange helps us find both customers and suppliers at a much cheaper cost of course. Not an exponential growth, but a steady rise nonetheless. However, with the whole world slowly moving towards cashless payments, one cannot tell for sure if this will truly survive the test of time. Videos News India. Latest Stories. Mutual Funds. Worth X.
Science And Future. Human Interest. Social Relevance. Healthy Living. Who We Are. Even though it was one of the major modes of transactions, it had some major drawbacks. All these issues made people think of alternatives and money was born.
The Conversation 0 Start a conversation, not a fire. Post with kindness. Post Comment. Play Quiz. Powered By. Absence of a common denominator in order to express exchange ratios creates many difficulties.
Money obviates these difficulties and acts as a convenient unit of value and account. There is problem of borrowing and lending. It is difficult to engage in contracts which involve future payments due to lack of any satisfactory unit. As a result, future payments are to be stated in term of specific goods or services. But there could be disagreement about the quality of the good, specific type of the good and change in the value of the good.
It is difficult for the people to store wealth or generalised purchasing power for future use in the form of goods like cattle, wheat, potatoes, etc. Holding of stocks of such goods involves costly storage and deterioration. How to exchange goods of unequal value? If a household wants to sell his cow and get in exchange cloth equal to the value of half of his cow, he cannot do so without killing his cow.
Thus, lack of divisibility of goods makes barter exchange impossible. In order to overcome the above disadvantages of the barter system, money was invented by the society. Article Shared by. Related Articles. Money: Meaning and Functions of Money — Discussed! We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits.
Do not sell my personal information. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience. Necessary Necessary. Necessary cookies are absolutely essential for the website to function properly.
These cookies ensure basic functionalities and security features of the website, anonymously. The cookie is used to store the user consent for the cookies in the category "Analytics". The cookies is used to store the user consent for the cookies in the category "Necessary".
The cookie is used to store the user consent for the cookies in the category "Other. The cookie is used to store the user consent for the cookies in the category "Performance". It does not store any personal data. Functional Functional. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance Performance. Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics Analytics. Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement Advertisement. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others Others. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Individuals and companies barter goods and services between each other based on equivalent estimates of prices and goods. The disadvantages are: 1. Lack of Double Coincidence of Wants 2. Lack of a Common Measure of Value 3.
0コメント