Barter system is a system that was used in ancient times to exchange goods. In other words, this system was used to exchange one commodity for another before the monetary system came into existence. For example, if a person having rice wants tea, then he can exchange rice with a person who has tea and needs rice. The economy having the barter system was called ‘C-C economy’, i.e. commodity is exchanged for commodity. The various drawbacks of the barter system are as follows :- 1. Problem ... barter , the direct exchange of goods or services—without an intervening medium of exchange or money—either according to established rates of exchange or by bargaining. The Barter System Money as a medium of exchange was not used in the early history of mankind. Exchange of the goods was not very frequent as households were self-sufficient. Whatever exchange took place between the households was in the form of barter , that is, exchange of goods for other goods. The barter system does not provide for the direct purchase of goods since there was no common unit of account and medium of exchange (Money). Note for Students: Example, if a person grows only wheat ...
