Question

Barter in Russia

explain what barter is.

How can barter negatively impact a modern industrial society?

Answer 1

ANSWER:

Barter system refers to a system where people exchanged services and goods for other services and goods in return without using a medium of exchange, such as money

The main inefficiencies in barter system are - lack of a standard unit of account; impossibility of division and subdivision of goods; need for double coincidence of wants, lack of information; difficulty in the case of services; difficulty in strong value; difficulty in calculating the value of goods; and production of large and very costly goods not feasible.

Because of the above discussed inefficiencies the barter economy would have no large-scale production, no benefits of the use of capital-intensive specialised machinery and no cheap and easy means in which wealth could be stored. In the modern economy when there is division of labour or specialisation and large-scale production, barter system could not fulfil the increasing requirements for exchange of goods thus no modern economy could exist on barter