(a)Trade by barter can be defined as a system in which people directly exchange one commodity for another.
(b) The main problems of trade by barter are:
(i) The problem of double co-incidence of wants
(ii) No unit of exchange and no common standard of value
(iii) The problem of storing goods discourages large scale production.
(iv) Indivisibility of bulky goods.
(v) No standard for deferred payment.
(vii) It does not make possible installment payments.
(viii) Non-portability of bulky goods.