Characteristics Of Money

30,352 views
30,046 views

Published on

Discover what qualities a commodity needs to have to become used as money - medium of exchange.

Published in: Economy & Finance, Business
0 Comments
4 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
30,352
On SlideShare
0
From Embeds
0
Number of Embeds
2,915
Actions
Shares
0
Downloads
219
Comments
0
Likes
4
Embeds 0
No embeds

No notes for slide

Characteristics Of Money

  1. 1. Characteristics of Money What qualities a commodity must have to become used as money
  2. 2. 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. ✦
  3. 3. Widely marketable Highly demanded and valued good, that is widely accepted. Thus making sure that we’ll be able to use it any time, any where. Gold is in greater demand than pianos and more valuable per kilo.
  4. 4. Transports easily The whole point of money is to make life easier. Thus convenience of use is very important. Cattle may walk, but it is easier to carry around coins.
  5. 5. Relatively scarce Scarce and demanded good means high value in small quantities. Sand is abundant and cheap. Gold & silver are very similar, except gold is about 15 times scarcer and more valuable.
  6. 6. Relatively imperishable We want to be able to use our money for future purchases. That’s why we need durable money. Fresh fish or flowers won’t do the job. Precious metals and gems last forever.
  7. 7. Easy to store Porcelain would be too fragile to use as money. Ice cubes, too, would be a poor choice for money. Gems and precious metals are a good choice.
  8. 8. Easily divisible Would you want to buy a pack of bubble gum with a 100$ bill and not get the change? Gems can be even destroyed in the process of dividing them.
  9. 9. All units are similar We don’t want to take courses in distinguishing and estimating the value of our money. For example, it takes an expert to evaluate gems.
  10. 10. Best choice-gold & Valued for their use; Easy to transport; Scare and valuable; Lasts forever; Easy to divide; All units are similar.
  11. 11. Read more at: gold-ambassador.com

×