CBSE Class 12-commerce Answered

Drawbacks of barter system are

1. Lack of double coincidence of wants: A person with a particular good has to find a person who has the goods of his wants and he should also possess the wanted good of the other person. Hence, exchange of good is not possible without the double coincidence of wants.
2. Lack of store of value: Wealth is stored in terms of goods as there was no money in existence. Storage of goods cost loss of value and movement of transfer. Hence, it is not practically possible to store the people’s purchasing power.