The essential quality of good money is that it should be acceptable to all, without any hesitation in the exchange for goods and services. The six essential qualities of ideal money are durability, portability, divisibility, uniformity, limited supply, and acceptability. By it, we mean the capability of a substance for being easily recognised and distinguished from all other substances. STUDY. Money has all the characteristics below. Disclaimer Copyright, Share Your Knowledge 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. And this implementation has a vital role in the business environment. Now the notion of money has changed. In order for something to qualify as money, then it should have the following qualities or features: Divisibility. Earlier writers seem, however, to have understood the subject almost as well. Portability 3. It should also possess the attribute of impressionability so that it may easily receive the impressions. 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 must be limited in supply as compare to demand for it. 13 - What are six qualities of the ideal money? It should not deteriorate rapidly with the passage of time. Match. It is because of this reason, that these metals have been used as money for a considerably long period of time. Ch. Indestructibility or Durability 4. William E. Beers on April 2, 2012 at 8:05 am Andy. An important quality of money is its acceptance. Any commodity which lacks this quality can not be accorded as money. Since the law declares Money as the legal tender, it … Gravity. Communicability is an essential quality of good money. Key Characteristics of Money. The precious metals, gold and silver by and large, possess the above mentioned qualities 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. Divisibility 6. Portability Durability: Money should be durable. If the money used is perishable it will lose its value in few days. Since the law declares Money as the legal tender, it has an inherent quality of general acceptability. 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. Cognizability 8. General Acceptability: Created by. Durability i.e. Stability of Value! Malleability 7. What is money? Everything on earth lacks at least one or several attributes, so theyre disqualified for the job of money that humanity seeks. It enables a person to make small purchases. PLAY. While a deeper look at money did raise many questions, there are at least some foundational truths that can be discerned about money.. For example, many economists and experts in the field agree that money must be a medium of exchange, a unit of account, and a store … Food, water, copper, salt, real estate, anything that has value. Paper money is considered good money as it can be shifted easily from one place to another. As such gold and silver are considered to be excellent money commodities. Stability of Value! 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 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. In other words, it must possess high value in small bulk. It should be neither too hard nor too soft. Humanity doesn’t seek second best as money (example: copper maybe, not rare enough) they always seek what works the … easy to carry around, convenient, easy to use; Divisible i.e. Money should not be subject to fluctuations in value. Money is a powerful tool if you know how to use it. 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. An important quality of money is its acceptance. kelsey_mccormick83. General Acceptability 2. Top eight qualities of an ideal money material are: 1. Infographic: The Properties of Money. Five characteristics of money. Durability is one of the most important qualities of money. Share Your PDF File Bartering was one way that people exchanged goods for other goods before money was created. 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. Learn. Ch. people can carry it around with them on a daily basis. Flashcards. Welcome to EconomicsDiscussion.net! 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. Paper money has this quality of store-ability. Explain the characteristics required by money if it is to carry out its functions effectively. 13 - What are three functions of money? An ideal money material should possess the following qualities: It is the very essence of money. The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability. An ordinary person should be able to judge the correctness of money. Precious metals possess this quality. In order to possess general acceptability, a commodity should have some intrinsic utility independent of its value for monetary purpose. It is possible only if the various units of money are identical. General Acceptability: Money must be generally acceptable. This paper analyzes changes in the quality of money and its influence on the purchasing power of money. Money has to be limited in supply yo generate a value for it. 4 Comments. Fluctuating standard of value is just like a changing yard or kilogram. 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. 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. It is possible only if the money is divisible into small units. This quality of money will encourage savings and investment. Legal qualities of money. –Money should be storable without any fall in value. Money is recognizable. Economical: The good money material has economical quality. 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. Spell. 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. 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. Money is a liquid asset used in the settlement of transactions. Reason is that when you have more than one person’s success secrets, you have edges over those who don’t. If its own value is not stable, how can it measure the values of other goods properly? Paper money possesses this quality. Therefore, people must have confidence in, and be ready to accept it as a medium of exchange. In the case of oxen and grain, a small value occupies a large bulk and weight; hence, they are unsuited as money commodity. Because of this feature of money, it makes it pretty easy for many to identify counterfeit currency. In fact, holding money is a more effective way of storing value than … Certainly, money will loses its general acceptability, if it ceases as a good medium of exchange. 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. Money must be able to be easily divided into smaller units or denominations in … The value of money should not depreciate with the passage of time. An ideal money material should possess the following qualities: 1. This also allows for the ease of transaction. It should not lose its value with the passage of time. It should be commonly acceptable for the sale and purchase of goods and services. Conclusion:- After discussing the essential qualities of a good money material, we find that so far not a single commodity has been … The money system cannot last for a longer period if it is too much costly. 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. Good money requires acceptance to all without any hesitation. 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. it can be broken down into smaller denominations; Hard to counterfeit - i.e. Money is a medium of exchange; it allows people to obtain what they need to live. What are the characteristics of money or the qualities of good money? Characteristics of Money and Inflation & Deflation Characteristics of Money. Indestructibility or Durability 4. Money is anything that is generally acceptable as a medium of exchange, common measure, store of value, … TOS4. They've found that people who are good with money are generally goal-driven, value-driven, accountable, and efficient. There are a lot of characteristics of money, but economic science determines six basic properties. Everyone must find it very easy to recognize it and know its value. PROTECT YOURSELF, and do it NOW! 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. The six characteristics of money are durability, portability, acceptability, limited supply, divisibility and uniformity. It is possible only if the various units of money are identical. This quality of money will encourage savings and investment. 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. These are all critical characteristics of money. 13 - Complete each of the following sentences: A... Ch. In order that a commodity may be used as a measure of value, it is essential that its units are similar in all respects. Volume 12, Number 4 (2009) Much has been written about the quantity of money and its effects on money’s purchasing power. Any commodity which lacks this quality can not be accorded as money. Top eight qualities of an ideal money material are: 1. An ordinary person should be able to judge the correctness of money. The value of money should not depreciate with the passage of time. It is a common myth that traditional economies usually functioned on a system of barter such that goods were directly exchanged. If people lose confidence in money and refuse to accept it in payments, it will not work as money any further. NOTE : Anything that is generally acceptable as a means of exchange for goods and services bought is money. 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. 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. it can’t easily be faked or copied; Must be generally accepted by a population; Valuable – generally holds value over time Here are some important qualities of good money: General Acceptability. Privacy Policy3. 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. The cost of printing currency notes and minting coins must be lower. In order for something to qualify as good money, then it should have the above qualities. 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. Homogeneity 5. The money material should be capable of being melted, beaten and given convenient shapes. After deputies kill Black man, Vancouver, Wash., erupts Share Your Word File Qualities of Good Money. Portability 3. 13 - Discuss the various ways in which London... Ch. This is not the case with precious metals. Money is easily divisible. Cognizability 8. All portions or specimens of the substance used as money should be homogeneous, that is, of the same quality, so that equal weights have exactly the same value. General Acceptability 2. 4].Scarcity – The scarcity is the quality of good money material. it needs to last; Portable i.e. For the paper money, it also means that it must be resistance to wear and tear for a long time. It practically happened in Kuwait during the gulf war, when people refused to accept Kuwaiti Dinars in payments. 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. Share Your PPT File, Changes in Money Supply: it’s Meaning and Determinants. 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. 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. The standard unit of money must be blank into smaller units to accommodate small/large purchases (pennies, nickels, dimes, quarters, etc.) Ch. Homogeneity 5. . A thousand rupee note can be changed into the notes of small denominations. The people accept even fiat money (money issued without keeping any metallic reserves) due to the government support. But how do we use the characteristics of money to our advantage for successful business? Money is homogenous. 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. Home Depot draws fire after co-founder backs Trump. Harris explained these qualities with remarkable clearness in […] When sand and stones were used as money people had less value for money as everyone was … Test. The most important requirement here is for that material (money) to … Following are the qualities of good money: General acceptance. 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 The qualities of good Money, are as under. However, in economics, money is taken in a broader sense. Money is often in the forms of coins and paper. I believe, if you can adopt these qualities, it is possible you perform better in blogging than before. 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. Money serves as a store of value, a unit of account and as a medium of exchange. Good money is that which is durable and long lasting. If the former, it cannot be easily coined; If the latter, it would not last long. Malleability 7. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. 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. In this article we are going to take a look at some of the major characteristics or features of money. 13 - Most economists believe that the better fiat money... Ch. It will cease to be current. The textbook by Abel, Bernanke, and Croushore (2008) does not even discuss the qualities of money at all. Money acts as a unit of account, a medium of exchange and a store of value. This quality of money makes best use of money possible. The main characteristics of money are durability, divisibility, portability, acceptability, limited supply and uniformity. Anything, which is acceptable in a certain payment but not generally acceptable, cannot/be regard as good money. Terms in this set (5) Divisibility. 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. Money can be exchanged for goods, services and labor. First and foremost, money acts as a medium of exchange that facilitates commercial transactions. Paper notes and modern coins of different denominations are identical in size and color; therefore they can be recognized very easily. Another quality of Money is it should be store-able and it should not be depreciated with time.
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