DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : Md. Qadeer Rehman
Designation : HEAD OF SECTION
Branch : D.C.C.P.
Institute : K D R Govt, Polytechnic,
Wanaparthy.
Year : I year
Subject : Business Organization
Subject code : CCP-104
Topic : Money

Duration : 50 mts
Sub topic : Comparison between barter
system and money
Teaching Aids : Diagrams
CCP104.139 1
Objectives

On completion of this you would be able to:

 Explain the barter system and its merits
and demerits
 Explain the differences between the
barter system and money

CCP104.139 2
Recap:

 The barter system

 The difficulties in Barter system
 The definition of money
 The evolution of money
 The kinds of money
 The functions of money

CCP104.139 3
Defects in Barter System

 Lack of double coincidence of wants

 Lack of divisibility
 Lack of measure value
 Difficult in transportation
 Lack of store value
 Inconvenience in regular payment

CCP104.139 4
Merits of Barter System

 Exchange of commodities for commodities

 Suitable for uncivilized or less Civilized
societies
 Family size was limited
 Transport network was not required
 No form of money required in any form

CCP104.139 5
Sl. Point of Barter System Money
N difference
o
1 Wants Lack of double Coincidence is not
coincidence necessary
2 Commodi Commodities are Money is necessary
ties necessary for to fulfill wants
exchange
3 Divisibility Divisibility is money may be
impossible ex: cow, divided as per
horse articles
4 Storage Lack of storage of Money can be stored
goods

CCP104.139 6
Sl. Point of Barter system Money
No. difference
5 Inconvenie Commodities Fee can be fixed and
nce in may not be easy payment
payment suited for
mode payment Ex:
doctors, Lawyers
6 transportati Lack of transport Transport network
on Facilities will boost the
movement of goods
7 Civilization Suitable for old Civilized and modern
civilized society users the
uncivilized money
8 Family size limited no of
members in a
family
CCP104.139 7
Summary

we have discussed about

 Barter system and its defects

 The merits of barter system
 The demerits of barter system
 Comparison between the barter
system and money

CCP104.139 8
Quiz:
1.Lack of divisibility was a defect in the
following system

 Modern functions of money

 Barter system
 Metallic coins of money
 Paper money

CCP104.139 9
Quiz
2.The following were the main merits of barter
system

a) Suitable for less civilized societies

b) Family size and wants were limited
c) Commodities were exchanged for
commodities only
d) All of the above

CCP104.139 10
Quiz
3. Which one of the following is true in case of
money

d) The inherent defect in the barter system was

removed with money
e) The evolution of money as slowly removed
barter system in the years gone by
f) The metallic money removed the entire barter
system due to its defects in the modern era
g) All the above points .

CCP104.139 11
Frequently Asked Questions:

3. Explain the defects of barter system.

5. Explain any eight sentences the merits

of money.

CCP104.139 12
Frequently Asked Questions:

4. Explain in four sentences the following :

a. Defects in barter system.

b. Merits of barter system.
c. Demerits of barter system.
d. Money evolution.

CCP104.139 13