What are the 8 characteristics of money?

Top 8 Qualities of an Ideal Money Material

• General Acceptability:
• Portability:
• Indestructibility or Durability:
• Homogeneity:
• Divisibility:
• Malleability:
• Cognizability:
• Stability of Value:

What are the requirements for something to be considered money why does the dollar have value?

For the most part, inflation is caused when the money supply rises faster than the supply of other goods and services. To summarize, money has value because people believe that they will be able to exchange this money for goods and services in the future.

What characteristics must good money possess?

The qualities of good money are:

• General acceptability.
• Portability.
• Durability.
• Divisibility.
• Homogeneity.
• Cognizability.
• Stability.

What are the 3 types of money?

Money comes in three forms: commodity money, fiat money, and fiduciary money. Most modern monetary systems are based on fiat money. Commodity money derives its value from the commodity of which it is made, while fiat money has value only by the order of the government.

What is the real use of money?

Money serves as a medium of exchange, as a store of value, and as a unit of account. Medium of exchange. Money’s most important function is as a medium of exchange to facilitate transactions.

What are the classification of money?

Some of the major leads under which money has been classified are as follows: (i) Full bodied Money (ii) Representative Full-bodied Money and (iii) Credit Money. Money can be classified on the basis of relationship between the value of money as money and the value of money as a commodity. (iii) Credit money.

What are the two types of money?

There are two types of money: commodity money, which is an item used as money, but which also has value from its use as something other than money; and fiat money, which has no intrinsic value, but is declared by a government to be the legal tender of a country.

What are the characteristics of money material?

The money material should be capable of being melted, beaten and given convenient shapes. It should be neither too hard nor too soft. If the former, it cannot be easily coined; If the latter, it would not last long. It should also possess the attribute of impressionability so that it may easily receive the impressions. 7. Cognizability:

What is general acceptability of money?

General Acceptability: It is the very essence of money. 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. It will cease to be current.

What are the characteristics of an ideal money commodity?

The value of a material, which is used to measure the value of all the other materials, must be stable. The ideal money commodity should, as such, possess utility, portability, durability, homogeneity, divisibility, malleability, Cognoscibility and stability of value.