barter

Examples of barter in the following topics:

• The Functions of Money

  • The monetary economy is a significant improvement over the barter system, in which goods were exchanged directly for other goods.
  • The barter system has a number of limitations which make transactions very inefficient, including:
  • This is not possible in a barter economy.
  • Despite the long list of limitations, the barter system has some advantages.
  • The money system is a significant improvement over the barter system.

• Barter and Functions of Money

  • Unfortunately, barter has many problems.
  • Problem 1: Barter suffers from a double coincidence of wants.
  • Variable E indicates the number of price ratios while n is the number of products produced in a barter system.
  • Consequently, a barter society would produce a limited number of goods and services.
  • Money eliminates many problems with barter and has four functions.

• Chapter Questions

  • How do the functions of money overcome the problems associated with barter?

• Countertrade

  • Bartering: One party gives salt in exchange for sugar from another party.
  • Barter: Exchange of goods or services directly for other goods or services without the use of money as means of purchase or payment.
  • In 2000, India and Iraq agreed on an "oil for wheat and rice" barter deal, subject to UN approval under Article 50 of the UN Persian Gulf War sanctions, that would facilitate 300,000 barrels of oil delivered daily to India at a price of $6.85 a barrel, while Iraq oil sales into Asia were valued at about $22 a barrel.

• National Income

  • For instance, some measures count only goods and services that are exchanged for money, excluding bartered goods, while other measures may attempt to include bartered goods by imputing monetary values to them.

• Answers to Chapter 1 Questions

  • Barter is inefficient because it does not allow people to specialize in the production of goods and services.
  • Each function of money overcomes a problem with barter and allows people to specialize in the production of goods and services.

• Importance of Cash Flow Accounting

  • For example, a company may be profitable but generate little operational cash (as may be the case for a company that barters its products rather than selling for cash or when its accounts receivable turnover is long).

• Defining Price

  • Bartering is an exchange of goods or services in return for goods or services.
  • Derived from a bartering system (exchanging goods of equal value), the monetary system of each society provides a more convient way to purchase goods and accumulate wealth.

• Marketing Data Types

  • While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers.
  • While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services (including labor) in exchange for money from buyers.

• Exporting

  • In national accounts, exports consist of transactions in goods and services (sales, barter, gifts, or grants) from residents to non-residents.The exact definition of exports includes and excludes specific "borderline" cases.