Q:

What are the advantages of the barter system?

A:

Quick Answer

According to The Nest, the main advantage of the barter system is its flexibility, which enables the exchange of one product for another. Bartering also helps save money that may have otherwise been used to travel to a shop to buy an item. In some cases, bartering does not entail exchanging or losing the possession of an item. In such cases, service such as maintenance is exchanged for a good.

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Full Answer

Bartering refers to a form of transaction in which a person exchanges a product or service for another. A key principle of the barter system is that money is not exchanged between the trading partners. A notable difference between bartering and buying is that in the former method, a partner offers an item he does not need in exchange for a desired item. A clear advantage of this method is saving money. In addition, each party gets the item he wants without spending any money. Although it started in ancient times, bartering is used as a mode of trade even in modern times. For instance, there are many online bartering sites on which people advertise their items and list the items for which they are willing to trade their goods.

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Related Questions

  • Q:

    What are some examples of the barter system?

    A:

    Bartering involves exchanging goods or services for other goods and services without involving money. For example, a store owner giving a contractor store credit in exchange for carpentry work is an example of bartering. A baker might bake a cake for his accountant in exchange for services.

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  • Q:

    What are the advantages and disadvantages of the price system?

    A:

    According to resources on the Pierce College website, the price or market system creates advantages of economic freedom. It also lowers costs. The disadvantages include instability, monopolistic control and income inequality.

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  • Q:

    What is money's basic advantage as compared to barter?

    A:

    In a currency system, most items have a predetermined value, making transactions fast and standardized. When consumers know the cost of an item in advance, they can simply present the cash necessary to purchase the item. Paying with money also allows consumers to make purchases without worrying about finding high-demand items to trade.

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  • Q:

    What are the advantages and disadvantages of a monopoly?

    A:

    The advantages of a monopoly include reducing resource waste, improving efficiency due to better investments, providing discounts to the economically weak and investing in research and development; some disadvantages include poor service, low quality goods and higher prices, no consumer sovereignty and no competition. When a monopoly has low competition, this may result in consumers getting goods that are either out of date or low in quality.

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