Qualities of Good Money Material-
For anything to be called money, it requires some characteristics.
The qualities of good money are as follows -
1. Divisibility - It should be divisible in different denominations. For example, 5 rupees, 10 rupees, 50 rupees, etc. Money material should be capable of division. Cattle were used as money in the past. But they lacked divisibility. You can't divide a cattle. So, over a period of time, cattle were replaced by the better forms of money
2. Durability - The commodity used to produce money must be durable. It should be capable of lasting longer. Anything perishable cannot be used as money nor can be used to make money. For example, metals are durable. Hence they are used to make metallic coins.
3 General Acceptance - For a thing to be used as money, it should have general acceptance. People should be ready to accept it as money without any hesitation.
4. Recognition - Anything to be used as money should be easily recognizable. One should easily be able to recognize it and should be able to distinguish it from anything else.
5. Homogeneity - Money should be homogeneous, in the sense that money of equal denomination should be of equal size, shape, quality etc. For example, cattle lack this quality. They all are not of the same size, same colour, same shape, etc. And so eventually, over a period of time, they were replaced by the better forms of money.
6. Portability - Money should be easily portable. It should not be very difficult for someone to take it from one place to another. For example, paper currencies are very portable, but carrying cattle from one place to another is very difficult.
7. Stability - Money should have general stability in value. It should not be subject to fluctuations in the value.
Also refer - Functions of Money
For anything to be called money, it requires some characteristics.
The qualities of good money are as follows -
1. Divisibility - It should be divisible in different denominations. For example, 5 rupees, 10 rupees, 50 rupees, etc. Money material should be capable of division. Cattle were used as money in the past. But they lacked divisibility. You can't divide a cattle. So, over a period of time, cattle were replaced by the better forms of money
2. Durability - The commodity used to produce money must be durable. It should be capable of lasting longer. Anything perishable cannot be used as money nor can be used to make money. For example, metals are durable. Hence they are used to make metallic coins.
3 General Acceptance - For a thing to be used as money, it should have general acceptance. People should be ready to accept it as money without any hesitation.
4. Recognition - Anything to be used as money should be easily recognizable. One should easily be able to recognize it and should be able to distinguish it from anything else.
5. Homogeneity - Money should be homogeneous, in the sense that money of equal denomination should be of equal size, shape, quality etc. For example, cattle lack this quality. They all are not of the same size, same colour, same shape, etc. And so eventually, over a period of time, they were replaced by the better forms of money.
6. Portability - Money should be easily portable. It should not be very difficult for someone to take it from one place to another. For example, paper currencies are very portable, but carrying cattle from one place to another is very difficult.
7. Stability - Money should have general stability in value. It should not be subject to fluctuations in the value.
Also refer - Functions of Money
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