Business Ehtichs

7. M wholenessy and Banking Money is something that is generally accepted as a medium of stand in. Its main aim is to facilitate the exchange of goods and run. in advance money came into use, exchange of goods and services took place done transaction schema. job arranging implies the direct exchange of goods for goods. much(prenominal) an economy is called C-C economy i.e., trade good for commodity exchange economy. In such an economy, the trading salutes ar 1) search cost 2) cost of waiting i.e., disutility of waiting Drawbacks of handicraft system 1) insufficiency of double coincidence of wants: The simultaneous fulfillment of usual wants by buyers and sellers is known as double coincidence of wants. concern system requires double coincidence of wants. If A possesses a frighten and wants exchange it for a horse, he has to find a mortal who cannot totally spare a horse but in whatever case wants a cow. 2) Lack of common measure of mensurate: It relates to the absence seizure of a common unit in terms of which venture the value the goods and services. In what proportion the goods are to be exchange depends upon the necessities of the two parties in which case one party may be bound to suffer. This problem is aggravate if the commodity touch is indivisible.

3) Lack of standard of deferred payments: Barter system lacks any qualified unit to engage in contracts that convey afterlife payments. In a barter economy, future payments would wear to be stated in terms of goods or services. This could head up to the following problems: a) there could be disagreement regarding which specific commodity would be use for repa yments. b) there could be disagreement reg! arding lumber of goods or services to be repaid. c) the commodity to be repaid would extend or precipitate in its market value. 4) Lack of descent of value: Barter system does not provide for any method of storing generalized buy power. People cannot store purchasing power for future use due to problems such as costly storage, derogation in...If you want to get a bounteous essay, order it on our website: OrderEssay.net

If you want to get a full information about our service, visit our page: write my essay