Barter system explained.

                                     

Today we are going to learn about Barter system
Barter system what is a barter system?
In the old days when there was no money People exchanged services and goods for other services and goods in return.
Introduced by Mesopotamia tribes,Goods was exchanged for food, tea, weapons
Example,
 suppose you have 2 potatoes and you want bread and another person have bread and he want potatoes so you both can exchange your commodities.
What are the problems in barter system?
1.Double Coincidence of Wants
        Suppose you want bread in exchange of potatoes, then you have to find a person who has bread and want's potatoes which sometimes with such a diverse commodities, It is
difficult to find.
2.Lack of a Standard Unit of Account
        When you find such a person ,after that who will decide how many potatoes you should give in exchange of bread ? this is due to lack of standard unit of account.

                             

TRIVIA
Due to lack of money, bartering became
popular in the 1930s during the Great Depression.
It was used to obtain food and various other services.