Q.What is meant by Barter system?

Barter system means the direct exchange of goods and services for other goods and services without any money.

In the earliest stage of the evolution of commerce, there was no money. To satisfy their needs, people simply exchanged the goods they had for the goods they wanted — this is the barter system.

Meaning and features:

• It is a direct goods-for-goods (or goods-for-services) exchange, e.g. a farmer giving grain to a weaver in return for cloth.
• It worked in small, self-sufficient communities. …

The barter system is the direct exchange of goods and services for other goods and services without the use of money.

In the early period of human history, before money came into use, trade was carried on by the barter system. Under this system a person having a surplus of one commodity exchanged it directly for another commodity he needed from someone else — for instance, a farmer exchanging grain for a weaver's cloth.

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