Post
Topic
Board Economics
Re: Money vs Barter
by
Toreadore
on 08/10/2018, 21:09:24 UTC
Money is one of the important concepts, This section talks about money from the perspective of microeconomics.when people exchange goods and services without using money, this is called barter. "I'll cook dinner if you'll do the dishes" is an example of barter. Imagine an economy in wich i can sell services as a consultant to banks, but what i want is to buy a new suit. the clothing store that sell suits does not have any use for my services as a banking consultant. i sell consulting services for money, and i buy a suit using money. money serves as a medium of exchange. the bank does not sell suits. how can barter work?

There is a reason a barter is really inconvenient for our current times. First of all, not every and all goods are available at the market at the given time, so you may just be sitting with your, say, "furs", if you want to trade them for "lumber", but "lumber" trader wants some "spices". That's for a simplest example.
Another thing is the prices isn't really fixed, in barter system. Everyone just make up their own prices, and that makes overall market chaotic.