Write the limitation of barter system.How …

The limitations of the barter system:

(i)Lack of Double Coincidence of Wants: Barter system can work only when both buyer and seller are ready to exchange each other’s goods.

(ii)Lack of Common Measure of Value: In the barter system, all commodities are not of equal value and there is no common measure (unit) of value of goods and services, in which exchange ratios can be expressed. 

(iii)Lack of Standard of Deferred Payment: The borrower may not be able to arrange goods of exactly same quality at the time of repayment.

Money overcomes the problem of barter system by replacing the C-C economy with monetary economy (where 'C stands for commodity).
(i) In the barter system, there was a problem of double coincidence of wants. It was very difficult to match the expectations of two different individuals. Thus, money was invented to overcome the problem of double . coincidence of wants.
(ii) When there was no money, it was difficult to give common unit of value to goods or commodities, but when money was evolved, it gave a common unit of value to every goods and services.
(iii) Money facilitates the contractual future payments which were impossible at the time of barter system.