. What is a barter system What are its drawbacks

Best Answer

Explanation:

• The system of exchange that existed during the ancient period was known as the barter system. 
• Under this system of exchange, commodities were used as a medium of exchange, wherein one commodity was exchanged for another. 
• For example, an individual who makes pots and wants 1kg of rice, would exchange it with another individual growing rice in exchange of an earthen pot.
• The barter system has many drawbacks like difficulty finding a commodity exchanger, calculating the exact value of a commodity and holding stock of problem, unable to store value, etc.

Final Answer: Under the barter system of exchange, commodities were used as a medium of exchange, wherein one commodity was exchanged for another.The barter system has many drawbacks like difficulty finding a commodity exchanger, calculating the exact value of a commodity and holding stock of problem, unable to store value, etc.