Barter system

Question 1

What is a barter?

Answer 1

Barter is an act of trading goods or services between two or more parties without the use of money.

Question 2

Limitations of barter system

Answer 2

1. Double coincidence of wants and needs.
2. Lack of Divisibility of commodities.
3. Lack of store of value.
4. Lack of common measure value .
5. Difficulity in making differed payments.

Question 3

Advantages of barter system

Answer 3

Advantages:

1.No need for money

2.Flexibility

3.No inflation

4. Facilitates trade in absence of financial infrastructure
5. Cultural and social significance

Question 4

Why were humans described as economic animals?

Answer 4

humans use products with in our natural environment to satisfy basic wants and needs.

Question 5

Subsistence

Answer 5

Subsistence is satisfying one’s wants and needs with the use of natural resources .

Question 6

The subsistence economy

Answer 6

The subsistence economy also referred as Traditional economy. A subsistence economy is an economy directed to basic subsistence, the provision of food, clothing, shelter rather than to the market.

Question 7

Economy meaning

Answer 7

The term economy refers to the society as a whole. It may further discribe as the way how a country managers it resources.

Question 8

Direct and indirect production

Answer 8

Direct production is providing goods and services for their wants and needs without the help of others. Indirect production is producing goods and services to satisfy the needs and wants of others in the society