Which of the following is a disadvantage of bartering compared to using currency to purchase goods?

• A. Bartering increases the efficiency of large-scale transactions.
• B. Bartering requires a double coincidence of wants between traders.
• C. Bartering allows for easier comparison of prices.
• D. Bartering provides a standardized unit of account.

Answer: (B)

Verified step by step guidance

1. Understand the concept of bartering: Bartering is the direct exchange of goods and services without using money as a medium.
2. Identify the key characteristics of bartering: It requires that both parties have something the other wants, known as the 'double coincidence of wants.'
3. Compare bartering to using currency: Currency acts as a medium of exchange, a unit of account, and a store of value, which simplifies transactions.
4. Recognize the disadvantage of bartering: Because it requires a double coincidence of wants, it is less efficient, especially for large-scale or complex transactions.
5. Conclude that the main disadvantage of bartering compared to currency is the need for a double coincidence of wants, making transactions more difficult and less efficient.