Created by. ONLY PHYSICAL gold and silver are money, and shortly ALL seven billion of the world’s citizens will be painfully aware of this historical FACT. William E. Beers on April 2, 2012 at 8:05 am Andy. In simple terms, money refers to the currency that consists of notes and coins. First: Money is a store of value. Top eight qualities of an ideal money material are: 1. The standard unit of money must be blank into smaller units to accommodate small/large purchases (pennies, nickels, dimes, quarters, etc.) An ordinary person should be able to judge the correctness of money. Durability - Durability of money is such that it can be used over and over again; hence it must survive wear and tear for long periods. Properties/Qualities/Merits of Good Money: The commodity which is to serve as money should have following properties or qualities: (1) General Acceptability: The most important property of money is this that it should be generally acceptable. A commodity fit to be used as money must be such that it can be easily and economically transported from one place to the other. As such gold and silver are considered to be excellent money commodities. Following are the qualities of good money: General acceptance The essential quality of good money is that it should be acceptable to all, without any hesitation in the exchange for goods and services. But in a modern business environment, you can’t always rely on cash, so you have to look for online ways of transacting with your money. Money is recognizable. STUDY. What are the characteristics of money or the qualities of good money? people can carry it around with them on a daily basis. In order for something to qualify as good money, then it should have the above qualities. This is not the case with precious metals. Qualities of Good Money. Money serves as a store of value, a unit of account and as a medium of exchange. If the money used is perishable it will lose its value in few days. 4].Scarcity – The scarcity is the quality of good money material. Gold and silver are at once recognised by their distinctive colour, metallic and heavy weight for small bulk, and, as such, satisfy this condition admirably. If too much of money is available people will not create a value for money as everyone holds money in hand. Good money is that which is durable and long lasting. This is one of the easiest ejections a ref will ever make. Homogeneity 5. kelsey_mccormick83. The cost of printing currency notes and minting coins must be lower. The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability. How money originates Money is a commodity that is mainly used to obtain other goods; It must originate in free-market by the free choice of people; It must be valued and demanded as a good. I believe, if you can adopt these qualities, it is possible you perform better in blogging than before. In the case of oxen and grain, a small value occupies a large bulk and weight; hence, they are unsuited as money commodity. Conclusion:- After discussing the essential qualities of a good money material, we find that so far not a single commodity has been … Money is a liquid asset used in the settlement of transactions. Money can be defined as anything that is used and accepted by the general public as a medium of exchange and for the payment of goods and services. Their portions can be melted and remelted together any number of times without much loss. The value of a material, which is used to measure the value of all the other materials, must be stable. The essential quality of good money is that it should be acceptable to all, without any hesitation in the exchange for goods and services. There are a lot of characteristics of money, but economic science determines six basic properties. Durability means that dollar bills or coins are easily replaceable should they become damaged. Test. 1. Characteristics Of Money is very important subject for any business students.Any type of money may be considered as good money due to certain qualities. Durability i.e. –Money should be storable without any fall in value. A paper can last only for few months if it remains in circulation and a coin can work §s a medium of exchange for many years. Commentdocument.getElementById("comment").setAttribute( "id", "ad57099b9e1279cf3466eba2a3070b31" );document.getElementById("bb9a5a46ca").setAttribute( "id", "comment" ); Save my name, email, and website in this browser for the next time I comment. Stability of Value! Economical: The good money material has economical quality. Infographic: The Properties of Money. Money is easily divisible. General Acceptability: Money must be generally acceptable. Gold and silver are generally acceptable to all without any hesitation because they are used for ornamental and other purposes and can be easily sold as bullion, besides being used for monetary purposes. In order that a commodity may be used as a measure of value, it is essential that its units are similar in all respects. Scarcity: A good money material must be scarce in quantity or the way to obtain money issued must kept low as compared to the desire for it. 13 - What are three functions of money? And this implementation has a vital role in the business environment. In order for something to qualify as money, then it should have the following qualities or features: Divisibility. New York, Pageant Press  (DLC) 56008704 (OCoLC)1154146: Material Type: Document, Internet resource: Document Type: Internet Resource, Computer File: All Authors / Contributors: Arthur Kemp If its own value is not stable, how can it measure the values of other goods properly? The main characteristics of money are durability, divisibility, portability, acceptability, limited supply and uniformity. But how do we use the characteristics of money to our advantage for successful business? “It must not evaporate like alcohol, nor purely like animal substance, nor decay like wood, nor rust like iron. Another quality of good money is that it should be capable of making small purchases. Money acts as a unit of account, a medium of exchange and a store of value. Here are some important qualities of good money: General Acceptability. Money has all the characteristics below. Certainly, money will loses its general acceptability, if it ceases as a good medium of exchange. Now the notion of money has changed. Money is primarily a current medium exchange, for a person to buy goods and services from other person in the form of coins and banknotes (Freeman, 2012). Divisibility 6. An ordinary person should be able to judge the correctness of money. Money is a powerful tool if you know how to use it. Cognizability 8. If I work today and earn 25 dollars, I can hold on to the money before I spend it because it will hold its value until tomorrow, next week, or even next year. Ch. NOTE : Anything that is generally acceptable as a means of exchange for goods and services bought is money. PROTECT YOURSELF, and do it NOW! Humanity doesn’t seek second best as money (example: copper maybe, not rare enough) they always seek what works the … High Value: The money material should possess high value in small bulk, so that it can be conveniently carried and handled. An important quality of money is its acceptance. If people lose confidence in money and refuse to accept it in payments, it will not work as money any further. Characteristics of Money and Inflation & Deflation Characteristics of Money. It is possible only if the various units of money are identical. Bartering was one way that people exchanged goods for other goods before money was created. The qualities of good Money, are as under. They've found that people who are good with money are generally goal-driven, value-driven, accountable, and efficient. Money is a medium of exchange; it allows people to obtain what they need to live. it can’t easily be faked or copied; Must be generally accepted by a population; Valuable – generally holds value over time General Acceptability: Good money requires acceptance to all without any hesitation. It will cease to be current. Durability: Money should be durable. Food, water, copper, salt, real estate, anything that has value. It should not lose its value with the passage of time. 5 Qualities of a Blog That Makes Money June 9, 2020 by Kai Magsanoc In April 2020, the International Monetary Fund (IMF) declared that the world economy will go into recession, “the worst since the Great Depression” from 1929 to 1933. Only a few textbook authors (Colander 1995 and Sloman 1994) mention qualities of money while Melotte and Moore (1995) claim that a good money must be divisible, portable, durable, and stable in value. Terms in this set (5) Divisibility. Therefore, people must have confidence in, and be ready to accept it as a medium of exchange. It is possible only if it contains huge value in small bulk. Good money requires acceptance to all without any hesitation. Gold and silver are of the same quality throughout; their various parts are similar in chemical and physical composition and their consistency is the same throughout the mass. Money must be able to be easily divided into smaller units or denominations in … What are the characteristics … Harris explained these qualities with remarkable clearness in […] These are all critical characteristics of money. ITunes is one of the greatest benefits obtained when…, Money Market: Definition, Function, Characteristics,…, Text of the Exemplum (Definition, Characteristics,…, 6 Stages of History And Evolution of Money. This quality of money will encourage savings and investment. Explain the characteristics required by money if it is to carry out its functions effectively. This quality of money will encourage savings and investment. Homogeneity 5. It should be commonly acceptable for the sale and purchase of goods and services. One of the qualities of a good money material is that it can be stored for a longer period of time without loosing value to meet the future needs. An ideal money material should possess the following qualities: It is the very essence of money. By it, we mean the capability of a substance for being easily recognised and distinguished from all other substances. Qualities Of Money. Key Characteristics of Money. 13 - Complete each of the following sentences: A... Ch. Qualities of Good Money. Good money is always scarce. Since the law declares Money as the legal tender, it … Home Depot draws fire after co-founder backs Trump. Anything, which is acceptable in a certain payment but not generally acceptable, cannot/be regard as good money. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. PLAY. However, in economics, money is taken in a broader sense. Divisibility 6. The paper money is easier to carry because it has less weight than metallic money. Earlier writers seem, however, to have understood the subject almost as well. Durability is one of the most important qualities of money. Spell. It means money must be a thing of continued use. An ideal money material should possess the following qualities: 1. It functions based on the general acceptance of its value within a governmental economy and … Paper money has this quality of store-ability. Welcome to EconomicsDiscussion.net! The main quality of good money is its general acceptability. A thousand rupee note can be changed into the notes of small denominations. Cognizability 8. Everyone must find it very easy to recognize it and know its value. The most important requirement here is for that material (money) to … As a medium of exchange, money has to be continually handed about; and it will cause great inconvenience if every person receiving it has to scrutinise, weigh and test it. The money material should be capable of division; and the aggregate value of the mass after division should be almost exactly the same as before. 13 - What are six qualities of the ideal money? This also allows for the ease of transaction. Ch. In this article we are going to take a look at some of the major characteristics or features of money. Paper money possesses this quality. It is a common myth that traditional economies usually functioned on a system of barter such that goods were directly exchanged. In order to possess general acceptability, a commodity should have some intrinsic utility independent of its value for monetary purpose. Flashcards. Precious metals possess this quality. Money must be limited in supply as compare to demand for it. It should have certain distinct marks which nobody can mistake. Share Your Word File The six essential qualities of ideal money are durability, portability, divisibility, uniformity, limited supply, and acceptability. It is possible only if the money is divisible into small units. Malleability 7. Before publishing your Articles on this site, please read the following pages: 1. However, changes in the quality of money have been widely neglected. Frequent changes in the value of money will inject the element of instability in economy and people lose confidence in it.Moreover, money is a standard for measuring the values of other goods and services. Characteristics of Money What qualities a commodity must have to become used as money 2. Everything on earth lacks at least one or several attributes, so theyre disqualified for the job of money that humanity seeks.
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