Question

Using what you know about the functions of money and the charecteristics of money, is there anything else that could substitute for actual money? What about diamonds or a bank statement? Why would or would not something else work to meet our needs?

Answer 1

Anything that is generally accepted as a medium of exchange and acts as the store of value can be considered money. For actual money to get substituted it needs to be accepted , durable , portable , divisible, uniform and limited in supply. . If anything else than money is used for example a leaf of a banyan tree or so. Even it is accepted, it wont satisfy the criteria of uniformity and divisibility.Moreover one cannot restrict its supply. One can plant as many banyan tree as much they want to avail its uses. In that case it will lose its value. Therefore actual money cannot be substituted . But there is cheques & drafts that are considered near money which acts as money to some extent.

Bank statements helps to keep the record of one's bank account details. It provides the list of savings and withdrawal s of the consumer. It is in no case money.

Diamonds are high in value . It is indivisible . Diamonds cannot be created . It is found in mines and its availability cannot be determined. Diamonds are not of uniform sizes. It cannot be considered as a medium of exchange.  

The characteristic of money itself would not allow anything else to be meet its needs.