. 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.

 

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