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Questions and Answers
What is the most serious problem in the barter system?
What is the most serious problem in the barter system?
- Absence of common unit of measure
- Problem of future payments
- Lack of store of value
- Lack of double coincidence of wants (correct)
Why does a barter system suffer from the absence of a common unit of measure?
Why does a barter system suffer from the absence of a common unit of measure?
- People cannot store generalized purchasing power
- Values of different goods and services cannot be compared (correct)
- Commodities in the market have fluctuating values
- Future payments are not possible
What contributes to the lack of store of value in a barter system?
What contributes to the lack of store of value in a barter system?
- Fluctuating value of stored commodities
- Inability to store wealth in a generalized form
- High cost of storing goods (correct)
- Inability to make future payments
Why is making future payments problematic in a barter system?
Why is making future payments problematic in a barter system?
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What does the term 'double coincidence of wants' refer to in the context of the barter system?
What does the term 'double coincidence of wants' refer to in the context of the barter system?
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