Problems associated with barter system:

The problems associated with the system are:

(i) Double coincidence of wants: It entails finding a person who has what you

want and requires what you have. For example, a person who has a cow and needs a yam must search for another person who has a yam and needs a cow. This process is cumbersome and leads to a waste of time.

(ii) No common unit of measure: It is difficult to arrive at a uniform or an easily acceptable exchange rate between different commodities

(iii) The absence of a means of storing wealth or value: Under the barter system. It is difficult to store wealth because most articles of trade, especially agricultural products are easily perishable.

(iv) Difficult in making deferred payment: As a result of exchange rate problem, it is difficult to store wealth because most articles of trade, especially agricultural products are easily perishable.

(v) Problem of bulkiness and indivisibility of most goods: The goods are often too bulky to be carried from one place to the other, and are not capable of being into divided similar units to facilitate transaction

The introduction of money has enabled man to overcome the problem associated with the barter system.