What properties and characteristists should any type of money possess in order to be used as...

What properties and characteristists should any type of money possess in order to be used as money?

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Expert Solution

there are several features that any type of money must have:

(1) Easy to store as a lot of people would want to save money for future purposes. So any perishable or difficult to store commodities can not be used as money.

(2) The money should be easy to carry as transactions are going to take place in that money and if for instance a commodity is bulky and can not be carried, transactions can not happen.

(3) Divisibility: Mone should be divisible into smaller units as the values involved in the transaction might be smaller than what you have in the pocket. It should be possible to divide it into smaller units to be useful in all transactions.

(4) people should have faith in the value of the item used as money and they should not believe that the value will be altered (majorly fall) in the future. If it does, the commodity will br worthless and can not be used as money in the long term.

(5) Valuable. This is perhaps the most importnat feature that the commodity should be valuable and acceptable to all the people in the economy. It is only of this holds true that transactions can take place in the specified moeny.

Rahul Sunny answered 1 year ago

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