Solution

In the past, trading products was done through the barter system. It was a method of exchanging one commodity for another. A person who has 1 kg of wheat and wants 1 kg of rice in exchange for that can exchange the two if there is a person who is prepared to exchange rice for wheat, for example. It was known as a commodity for the exchange of commodities. The monetary system later took its place. The barter system contains the following drawbacks- 1. It suffered from the "double coincidence of wants," which states that for a trade to take place, two people must have complementary needs. Say, rice for wheat.

2. There was a lack of uniform measurement, therefore the traded item's worth was not always equal to the value of the other item. for instance, exchanging rice for a cow.

3. Due to the high rate of item deterioration, it was challenging to store the objects received in exchange for subsequent trades.

4. Future payments and contractual obligations were challenging to make.