Trade and Barter

Written by admin on May 16th, 2011

The history of barter exchange can be traced back to several eons ago. However do to the lack of access to history of the ancient ages, we cannot tell when this system exactly begun. There are several versions of barter. There is one to one barter which is practised between individuals. But this type of barter is more at an informal level. There is something called
modern barter as well. This has grown quite a bit with time. This has led to the increase in sales. In corporate barter media and advertising plays an important role for carrying out transactions. There is something called trade credit in corporate barter. This is a term form currency unit. The barter system sales in the United States have quite a huge value. In
international market, barter plays an important role and acts as a focal point to the disposable economy. In spite of having so many advantages, there are certain limitations to this system. This system is most applicable if both the individuals have surplus quantities of that item that the other one wants. This is quite an ideal situation and cannot occur always.

It is not always possible that you can determine the exact value of the good that you are exchanging. When you are paying in cash you can determine the exact amount. This is sadly not possible in barter. This relates to another limitation which is the lack of a measurable value. With barter, the system of trade also comes. Trade also plays an important role in economy and exchanges. It has helped business in increasing their efficiencies and also acts as a commercial organization. Trade is actually a form of transaction or commerce where goods, services or money is exchanged voluntarily. Trade always functions through the market. There is an intrinsic connection between this form of exchange and barter. Barter can be said to be an early form of trade. But there is a certain role of money in trade which is not there in barter. This system mostly occurs between regions unlike that in barter where the exchange occurs between individuals as well. In retail trade there is sale of merchandise or goods.

The history of trade also traces back to the ancient times. With times this form of exchange has kept on developing. By the twentieth century trade has expanded and become more acceptable among everyone. Free trade is something that developed in the late twentieth century and the early twenty first century. In international trade there happens certain exchange of goods across the borders of the nation. International trade plays a significant role in defining the gross domestic product or GDP of the country. This form of trade has been there since long but it is only in the recent centuries that it has expanded more. International trade is generally governed by the government and its quotas. It is also taxed by tariffs. Although there are certain restrictions when it comes to trade within countries, free trade can prevail if these restrictions and barriers are removed.


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