THE NATURE OF BUSINESS-BARTER VERSUS MONEY

This slideshow informs readers about barter.

1. THE NATURE OF BUSINESS Barter VS Money

2. At the end of this lesson, students should be able to : Explain the development of bartering system Discuss the problems of the bartering system

3. In the early economies, man provided from themselves. They built their homes, made basic clothes, hunted for food and grew crops. This type of production is called Subsistence Production, where they produced to meet their basic needs . However all of their needs could not be met…..so a system of trade known as Barter was developed!

4. How Barter works?? Take a look at this video on the bartering sytem https://www.youtube.com/watch?v=TrOgdem-WkE What did you notice? Where there any problems?

5. What is Barter ? It was the earliest form of trade It is the exchange of goods or services for another (good /service) without the use of money

6. ADVANTAGES: Better use of available resources It increased the variety and amount of goods/services available for trade It helped to avoid any loss from the surplus of goods produced Encouraged people to become specialised in production DISADVANTAGES: A double coincidence of wants: Can only exchange if each party desires what the other party has. Rate of exchange: could be difficult to be decided upon. Some goods are not divisible . Goods were bulky and difficult to transport . Store of Value – perishable goods could not be stored for a long time

7. Bartering Exercise Try out this super fun game to test you bartering skills: https://www.clevelandfed.org/learningcenter/escape-from-barter-island