What is a Money System?
- A money system is an economy in which money, or currency such as the US dollar is used to trade for goods.
What is a Barter System?
- A barter system is an economy in which goods and services are traded for other goods and services
- A barter system requires a double coincidence of wants; this means both trading parties must want what the other party is trying to trade. Finding this double coincidence can be time consuming and wasteful.
The money system is more commonly used around the world as it is easier, quicker, and more efficient that the barter system, because you do not need to find someone who wants exactly what you are selling and willing to give you what they have for it. Overall, when possible, a money system is more effective to use.