Page 11 - Countertrade
P. 11

Limitations of the Old Barter System





               Indivisibility of commodities:

               It is often difficult to measure and divide a commodity without loss in

               value. In most cases either the commodity is indivisible or requires a
               consensus to be reached.



               Absence of Store Value:

               More often than not wealth cannot be stored in bartered goods, as most
               of the commodities are perishable in the long run and non-monetary.




               Absence of Standard Value:

               Since there is no medium available to value a commodity, reaching a
               consensus on its value is difficult. How much is to be exchanged for
               another commodity is a problem and as such one party is likely to suffer
               through the exchange.
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