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There are many drawbacks to a barter economy.
First, the exchange of goods for other goods (or services) would require both economic agents in the transaction to want what the other is selling. This means that there has to be a double coincidence of wants .
It might also be impossible to undertake transactions where the goods are indivisible—that is, where one agent wishes to buy a certain amount of another’s goods, but that agent only has one indivisible unit of another good that is worth more than the good that the agent is trying to buy.
Another problem occurs if economic agents do not wish to exchange all of their goods on other goods and services. This may not be a problem, however, when the goods they have to sell can be stored safely so that they retain their value for the future. But if these goods are perishable, they will not be able to store value for their owner.
Finally, in a barter economy, there are many measures of value: the price of oranges in terms of pears; of pears in terms of bread; of bread in terms of milk; or of milk in terms of oranges.
A barter economy has no common measure of value that would make multiple transactions simple.
