kelsey_mccormick83. Match. The ideal money commodity should, as such, possess utility, portability, durability, homogeneity, divisibility, malleability, Cognoscibility and stability of value. The main characteristics of money are durability, divisibility, portability, acceptability, limited supply and uniformity. If people lose confidence in money and refuse to accept it in payments, it will not work as money any further. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. Top eight qualities of an ideal money material are: 1. Everything on earth lacks at least one or several attributes, so theyre disqualified for the job of money that humanity seeks. Stability of Value! it can’t easily be faked or copied; Must be generally accepted by a population; Valuable – generally holds value over time Portability 3. Privacy Policy3. The value of money should not depreciate with the passage of time. Before publishing your Articles on this site, please read the following pages: 1. Good money requires acceptance to all without any hesitation. Cognizability 8. Legal qualities of money. General Acceptability 2. Communicability is an essential quality of good money. By it, we mean the capability of a substance for being easily recognised and distinguished from all other substances. In fact, holding money is a more effective way of storing value than … An important quality of money is its acceptance. It should be neither too hard nor too soft. The value of a material, which is used to measure the value of all the other materials, must be stable. Top eight qualities of an ideal money material are: 1. Another quality of Money is it should be store-able and it should not be depreciated with time. This paper analyzes changes in the quality of money and its influence on the purchasing power of money. Fluctuating standard of value is just like a changing yard or kilogram. Learn. Now the notion of money has changed. 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. This is not the case with precious metals. Because of this feature of money, it makes it pretty easy for many to identify counterfeit currency. So, here is how to become a successful blogger and make money in Nigeria or any other part of the world: Be a better blogger The Essential Qualities of Money The Essential Qualities of Money MORGAN, E. V. 1969-09-01 00:00:00 Because money is generally accepted as a means of payment, the holder of money can acquire any good or any other financial assets by means of a single transaction ; he can simply buy what he wants, whereas the holder of any other asset must convert it into the means of payment before he can buy. Here are some important qualities of good money: General Acceptability. Created by. However, changes in the quality of money have been widely neglected. 13 - Discuss the various ways in which London... Ch. Portability 3. An ideal money material should possess the following qualities: It is the very essence of money. The paper money is easier to carry because it has less weight than metallic money. But how do we use the characteristics of money to our advantage for successful business? Terms in this set (5) Divisibility. The precious metals, gold and silver by and large, possess the above mentioned qualities of good money material. 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). What are the characteristics … it can be broken down into smaller denominations; Hard to counterfeit - i.e. It will cease to be current. Money must be limited in supply as compare to demand for it. The cost of printing currency notes and minting coins must be lower. It should also possess the attribute of impressionability so that it may easily receive the impressions. The money material should be capable of being melted, beaten and given convenient shapes. 4 Comments. STUDY. 13 - What are three functions of money? Indestructibility or Durability 4. In order for something to qualify as good money, then it should have the above qualities. Therefore, people must have confidence in, and be ready to accept it as a medium of exchange. An important quality of money is its acceptance. Destructible articles, such as eggs, dried cod fish, cattle or oil has certainly been used as currency; but what is treated as money one day must not soon afterwards be eaten up.” Gold coins are very lasting; they take about 8,000 years to wear out completely. Since the law declares Money as the legal tender, it has an inherent quality of general acceptability. An ordinary person should be able to judge the correctness of money. If the money used is perishable it will lose its value in few days. Money is recognizable. Money can be exchanged for goods, services and labor. And this implementation has a vital role in the business environment. Qualities Of Money. The main quality of good money is its general acceptability. 4].Scarcity – The scarcity is the quality of good money material. Good money is always scarce. Portability 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. Stability of Value! NOTE : Anything that is generally acceptable as a means of exchange for goods and services bought is money. 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. Durability means that dollar bills or coins are easily replaceable should they become damaged. Food, water, copper, salt, real estate, anything that has value. easy to carry around, convenient, easy to use; Divisible i.e. Divisibility 6. Volume 12, Number 4 (2009) Much has been written about the quantity of money and its effects on money’s purchasing power. This also allows for the ease of transaction. 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. In order to possess general acceptability, a commodity should have some intrinsic utility independent of its value for monetary purpose. 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. These are all critical characteristics of money. Explain the characteristics required by money if it is to carry out its functions effectively. Homogeneity 5. Portability: Money must be portable. Five characteristics of money. Durability is one of the most important qualities of money. people can carry it around with them on a daily basis. The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability. 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. 13 - Most economists believe that the better fiat money... Ch. Malleability 7. Communicability:- Communicability is an essential quality of good money. Good money should have the quality of portability. 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. Money is anything that is generally acceptable as a medium of exchange, common measure, store of value, … Money should not be subject to fluctuations in value. Test. 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. When money is divisible into small units, the consumer will get maximum satisfaction with his limited income by equating the marginal utility of all the purchased commodities. Gold and silver coins are more durable as compared to paper money. They've found that people who are good with money are generally goal-driven, value-driven, accountable, and efficient. Characteristics of Money What qualities a commodity must have to become used as money 2. Money acts as a unit of account, a medium of exchange and a store of value. Durability i.e. 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. 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. 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. Everyone must find it very easy to recognize it and know its value. Share Your PPT File, Changes in Money Supply: it’s Meaning and Determinants. Certainly, money will loses its general acceptability, if it ceases as a good medium of exchange. it needs to last; Portable i.e. The government's backing to money creates a sense of confidence. Key Characteristics of Money. In order that a commodity may be used as a measure of value, it is essential that its units are similar in all respects. Share Your PDF File Any commodity which lacks this quality can not be accorded as money. Ch. Money must be able to be easily divided into smaller units or denominations in … Ch. New York, Pageant Press [1956] (DLC) 56008704 (OCoLC)1154146: Material Type: Document, Internet resource: Document Type: Internet Resource, Computer File: All Authors / Contributors: Arthur Kemp Characteristics of Money and Inflation & Deflation Characteristics of Money. Earlier writers seem, however, to have understood the subject almost as well. What are the characteristics of money or the qualities of good money? Their portions can be melted and remelted together any number of times without much loss. 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. This quality of money will encourage savings and investment. This quality of money will encourage savings and investment. The essential quality of good money is that it should be acceptable to all, without any hesitation in the exchange for goods and services. Paper money possesses this quality. However, in economics, money is taken in a broader sense. In other words, it must possess high value in small bulk. Share Your Word File Money is a powerful tool if you know how to use it. Qualities of Good Money. Money serves as a store of value, a unit of account and as a medium of exchange. 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. Qualities of Good Money. It practically happened in Kuwait during the gulf war, when people refused to accept Kuwaiti Dinars in payments. General Acceptability: Indestructibility or Durability 4. 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. What is money? William E. Beers on April 2, 2012 at 8:05 am Andy. Anything, which is acceptable in a certain payment but not generally acceptable, cannot/be regard as good money. In simple terms, money refers to the currency that consists of notes and coins. The money system cannot last for a longer period if it is too much costly. The people accept even fiat money (money issued without keeping any metallic reserves) due to the government support. Paper money is considered good money as it can be shifted easily from one place to another. An ordinary person should be able to judge the correctness of money. Gravity. Silver coins are not equally lasting but wear out fairly slowly. This quality of money makes best use of money possible. Money is easily divisible. Conclusion:- After discussing the essential qualities of a good money material, we find that so far not a single commodity has been … Write. General Acceptability: Money must be generally acceptable. It should be commonly acceptable for the sale and purchase of goods and services. 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. The value of money should not depreciate with the passage of time. The standard unit of money must be blank into smaller units to accommodate small/large purchases (pennies, nickels, dimes, quarters, etc.) This is one of the easiest ejections a ref will ever make. 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. It means money must be a thing of continued use. If too much of money is available people will not create a value for money as everyone holds money in hand. The most important requirement here is for that material (money) to … “It must not evaporate like alcohol, nor purely like animal substance, nor decay like wood, nor rust like iron. . 1. There are a lot of characteristics of money, but economic science determines six basic properties. Cognizability 8. 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. 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. 13 - What are six qualities of the ideal money? As money is passed from hand to hand and is kept in reserve, it must not easily deteriorate, either in itself or as a result of wear and tear. Reason is that when you have more than one person’s success secrets, you have edges over those who don’t. It functions based on the general acceptance of its value within a governmental economy and … It is possible only if the various units of money are identical. The textbook by Abel, Bernanke, and Croushore (2008) does not even discuss the qualities of money at all. Money is a medium of exchange; it allows people to obtain what they need to live. Money is homogenous. Content Guidelines 2. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. It enables a person to make small purchases. Qualities of the Material of Money Chapter V Many recent writers, such as Huskisson, MacCulloch, James Mill, Garnier, Chevalier, and Walras, have satisfactorily described the qualities which should be possessed by the material of money. 13 - Complete each of the following sentences: A... Ch. Precious metals possess this quality. It should not lose its value with the passage of time. Homogeneity 5. Money has to be limited in supply yo generate a value for it. Paper notes and modern coins of different denominations are identical in size and color; therefore they can be recognized very easily. Flashcards. It should not deteriorate rapidly with the passage of time. Home Depot draws fire after co-founder backs Trump. Disclaimer Copyright, Share Your Knowledge Money is a liquid asset used in the settlement of transactions. Harris explained these qualities with remarkable clearness in […] TOS4. It is a common myth that traditional economies usually functioned on a system of barter such that goods were directly exchanged. The six characteristics of money are durability, portability, acceptability, limited supply, divisibility and uniformity. Money has all the characteristics below. Since the law declares Money as the legal tender, it … First and foremost, money acts as a medium of exchange that facilitates commercial transactions. Good money requires acceptance to all without any hesitation. Welcome to EconomicsDiscussion.net! High Value: The money material should possess high value in small bulk, so that it can be conveniently carried and handled. 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. General Acceptability 2. If its own value is not stable, how can it measure the values of other goods properly? First: Money is a store of value. Paper money has this quality of store-ability. I believe, if you can adopt these qualities, it is possible you perform better in blogging than before. If we use diamond as money and by chance it drops from our hand and breaks, we will suffer an enormous loss. It is possible only if the money is divisible into small units. Any commodity which lacks this quality can not be accorded as money. In order for something to qualify as money, then it should have the following qualities or features: Divisibility. An ideal money material should possess the following qualities: 1. A thousand rupee note can be changed into the notes of small denominations. The qualities of good Money, are as under. Unless a person knows that the money which he accepts in exchange for his goods or services will be taken without any objection by others as well, he will not accept it. 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. Another quality of good money is that it should be capable of making small purchases. As such gold and silver are considered to be excellent money commodities. Good money is that which is durable and long lasting. In the case of oxen and grain, a small value occupies a large bulk and weight; hence, they are unsuited as money commodity. Good money is that whose value is fairly stable. This lecture contains the functions of money and qualities of good money material. 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. What is money? It is possible only if the various units of money are identical. –Money should be storable without any fall in value.