bartering system

(noun)

Barter is a medium of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money.

Related Terms

Examples of bartering system 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:
    • Despite the long list of limitations, the barter system has some advantages.
    • The money system is a significant improvement over the barter system.
    • The use of money as a medium of exchange has removed the major difficulty of double coincidence of wants in the barter system.

  • Barter and Functions of Money

    • Variable E indicates the number of price ratios while n is the number of products produced in a barter system.
    • Problem 4: Business people would have trouble writing contracts for future payments of goods and services under a barter system.
    • Under a barter system, the author would search a market extensively to find a person who would exchange goods and services that the author needs.
    • This function of money allows the specialization of labor to occur and eliminates the problem of double coincidence of wants under a barter system.
    • Finally, this function of money eliminates the massive number of price exchange ratios that would occur under a barter system.

  • Functions of Money

    • It is necessary for developing efficient accounting systems, but its most important use is that it provides a method to compare the values of dissimilar objects.
    • It avoids the inefficiencies of a barter system, such as the dependence on the occurrence of a coincidence of wants.

  • 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.

  • Chapter Questions

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

  • Countertrade

    • Countertrade is a system of exchange in which goods and services are used as payment rather than money.
    • 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.

  • 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.
    • Differences between L, M3, M2, and M1 indicate the size of a country's financial system.

  • Marketing Data Types

    • A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange.
    • 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.
    • A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange.
    • 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.
    • However, a number of generic market segment systems also exist, e.g. the system provides a broad segmentation of the population of the United States based on the statistical analysis of household and geodemographic data.

  • 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.
    • If a country applies the general trade system, all goods entering or leaving the country are recorded.
    • If the special trade system (e.g., extra-EU trade statistics) is applied, goods which are received into customs warehouses are not recorded in external trade statistics unless they subsequently go into free circulation in the country of receipt.

  • The Economy under the Ming Dynasty

    • In the mid-15th century, the paucity of circulating silver caused a monetary contraction and an extensive reversion to barter.
    • Markets for these crops appeared in the rural countryside, where goods were exchanged and bartered.
    • To prevent such abuse, the Hongwu Emperor instituted two systems: Yellow Records and Fish Scale Records.
    • These systems served both to secure the government's income from land taxes and to affirm that peasants would not lose their lands.
    • Public works projects, such as the construction of irrigation systems and dikes, were undertaken in an attempt to help farmers.