13 - Complete each of the following sentences: A... Ch. Cognizability 8. STUDY. One of the qualities of a good money material is that it can be stored for a longer period of time without loosing value to meet the future needs. Money must be limited in supply as compare to demand for it. Harris explained these qualities with remarkable clearness in […] This quality of money will encourage savings and investment. Earlier writers seem, however, to have understood the subject almost as well. But in a modern business environment, you can’t always rely on cash, so you have to look for online ways of transacting with your money. Share Your PPT File, Changes in Money Supply: it’s Meaning and Determinants. Durability i.e. Gold and silver are of the same quality throughout; their various parts are similar in chemical and physical composition and their consistency is the same throughout the mass. But how do we use the characteristics of money to our advantage for successful business? In order to possess general acceptability, a commodity should have some intrinsic utility independent of its value for monetary purpose. Paper money has this quality of store-ability. If money is not recognizable by the general public then it cannot be called money. Good money is that which is durable and long lasting. Since the law declares Money as the legal tender, it has an inherent quality of general acceptability. Everyone must find it very easy to recognize it and know its value. Good money requires acceptance to all without any hesitation. . As money is passed from hand to hand and is kept in reserve, it must not easily deteriorate, either in itself or as a result of wear and tear. kelsey_mccormick83. It functions based on the general acceptance of its value within a governmental economy and … Qualities of Good Money. Top eight qualities of an ideal money material are: 1. Money is easily divisible. If we use diamond as money and by chance it drops from our hand and breaks, we will suffer an enormous loss. In fact, holding money is a more effective way of storing value than … Money acts as a unit of account, a medium of exchange and a store of value. Before publishing your Articles on this site, please read the following pages: 1. ITunes is one of the greatest benefits obtained when…, Money Market: Definition, Function, Characteristics,…, Text of the Exemplum (Definition, Characteristics,…, 6 Stages of History And Evolution of Money. It should be neither too hard nor too soft. Money serves as a store of value, a unit of account and as a medium of exchange. Reason is that when you have more than one person’s success secrets, you have edges over those who don’t. The money material should be capable of division; and the aggregate value of the mass after division should be almost exactly the same as before. It is possible only if the money is divisible into small units. The six essential qualities of ideal money are durability, portability, divisibility, uniformity, limited supply, and acceptability. Destructible articles, such as eggs, dried cod fish, cattle or oil has certainly been used as currency; but what is treated as money one day must not soon afterwards be eaten up.” Gold coins are very lasting; they take about 8,000 years to wear out completely. Qualities of the Material of Money Chapter V Many recent writers, such as Huskisson, MacCulloch, James Mill, Garnier, Chevalier, and Walras, have satisfactorily described the qualities which should be possessed by the material of money. Ch. It should have certain distinct marks which nobody can mistake. Certainly, money will loses its general acceptability, if it ceases as a good medium of exchange. Five characteristics of money. An important quality of money is its acceptance. Indestructibility or Durability 4. The value of a material, which is used to measure the value of all the other materials, must be stable. Home Depot draws fire after co-founder backs Trump. easy to carry around, convenient, easy to use; Divisible i.e. Content Guidelines 2. 13 - What are three functions of money? Scarcity: A good money material must be scarce in quantity or the way to obtain money issued must kept low as compared to the desire for it. 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. In other words, it must possess high value in small bulk. Durability means that dollar bills or coins are easily replaceable should they become damaged. Disclaimer Copyright, Share Your Knowledge First and foremost, money acts as a medium of exchange that facilitates commercial transactions. Cognizability 8. The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability. So, here is how to become a successful blogger and make money in Nigeria or any other part of the world: Be a better blogger Money is primarily a current medium exchange, for a person to buy goods and services from other person in the form of coins and banknotes (Freeman, 2012). Paper money possesses this quality. The main characteristics of money are durability, divisibility, portability, acceptability, limited supply and uniformity. Stability of Value! General Acceptability: Homogeneity 5. It is because of this reason, that these metals have been used as money for a considerably long period of time. Money is a liquid asset used in the settlement of transactions. Malleability 7. Characteristics of Money and Inflation & Deflation Characteristics of Money. It should not lose its value with the passage of time. What is money? In order for something to qualify as money, then it should have the following qualities or features: Divisibility. 13 - Discuss the various ways in which London... Ch. Gravity. Money can be defined as anything that is used and accepted by the general public as a medium of exchange and for the payment of goods and services. Infographic: The Properties of Money. What is money? It is a common myth that traditional economies usually functioned on a system of barter such that goods were directly exchanged. This website includes study notes, research papers, essays, articles and other allied information submitted by visitors like YOU. Frequent changes in the value of money will inject the element of instability in economy and people lose confidence in it.Moreover, money is a standard for measuring the values of other goods and services. 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. Legal qualities of money. The value of money should not depreciate with the passage of time. Characteristics Of Money is very important subject for any business students.Any type of money may be considered as good money due to certain qualities. General Acceptability: Money must be generally acceptable. After deputies kill Black man, Vancouver, Wash., erupts Now the notion of money has changed. Qualities Of Money. In simple terms, money refers to the currency that consists of notes and coins. Key Characteristics of Money. The six characteristics of money are durability, portability, acceptability, limited supply, divisibility and uniformity. If the former, it cannot be easily coined; If the latter, it would not last long. Qualities of Good Money. Therefore, people must have confidence in, and be ready to accept it as a medium of exchange. If people lose confidence in money and refuse to accept it in payments, it will not work as money any further. The standard unit of money must be blank into smaller units to accommodate small/large purchases (pennies, nickels, dimes, quarters, etc.) Volume 12, Number 4 (2009) Much has been written about the quantity of money and its effects on money’s purchasing power. Paper notes and modern coins of different denominations are identical in size and color; therefore they can be recognized very easily. Gold and silver are at once recognised by their distinctive colour, metallic and heavy weight for small bulk, and, as such, satisfy this condition admirably. Privacy Policy3. Good money is always scarce. When sand and stones were used as money people had less value for money as everyone was … Following are the qualities of good money: General acceptance The essential quality of good money is that it should be acceptable to all, without any hesitation in the exchange for goods and services. It is possible only if it contains huge value in small bulk. By it, we mean the capability of a substance for being easily recognised and distinguished from all other substances. When money is divisible into small units, the consumer will get maximum satisfaction with his limited income by equating the marginal utility of all the purchased commodities. Learn. it can’t easily be faked or copied; Must be generally accepted by a population; Valuable – generally holds value over time –Money should be storable without any fall in value. Portability: Money must be portable. Anything, which is acceptable in a certain payment but not generally acceptable, cannot/be regard as good money. Money should not be subject to fluctuations in value. Flashcards. This also allows for the ease of transaction. These are all critical characteristics of money. The government's backing to money creates a sense of confidence. Good money should have the quality of portability. In order for something to qualify as good money, then it should have the above qualities. ONLY PHYSICAL gold and silver are money, and shortly ALL seven billion of the world’s citizens will be painfully aware of this historical FACT. Money must be able to be easily divided into smaller units or denominations in … Durability - Durability of money is such that it can be used over and over again; hence it must survive wear and tear for long periods. Money is recognizable. Any commodity which lacks this quality can not be accorded as money. In the case of oxen and grain, a small value occupies a large bulk and weight; hence, they are unsuited as money commodity. Homogeneity 5. Here are some important qualities of good money: General Acceptability. Portability 3. Bartering was one way that people exchanged goods for other goods before money was created. Welcome to EconomicsDiscussion.net! Communicability:- Communicability is an essential quality of good money. Everything on earth lacks at least one or several attributes, so theyre disqualified for the job of money that humanity seeks. There are a lot of characteristics of money, but economic science determines six basic properties. An ideal money material should possess the following qualities: 1. Indestructibility or Durability 4. The most important requirement here is for that material (money) to … For the paper money, it also means that it must be resistance to wear and tear for a long time. Characteristics of Money What qualities a commodity must have to become used as money 2. Good money is that whose value is fairly stable. This quality of money will encourage savings and investment. Precious metals possess this quality. William E. Beers on April 2, 2012 at 8:05 am Andy. Money has to be limited in supply yo generate a value for it. A paper can last only for few months if it remains in circulation and a coin can work §s a medium of exchange for many years. Communicability is an essential quality of good money. If too much of money is available people will not create a value for money as everyone holds money in hand. Stability of Value! Another quality of Money is it should be store-able and it should not be depreciated with time. It will cease to be current. 4].Scarcity – The scarcity is the quality of good money material. TOS4. It is possible only if the various units of money are identical. Humanity doesn’t seek second best as money (example: copper maybe, not rare enough) they always seek what works the … The Essential Qualities of Money The Essential Qualities of Money MORGAN, E. V. 1969-09-01 00:00:00 Because money is generally accepted as a means of payment, the holder of money can acquire any good or any other financial assets by means of a single transaction ; he can simply buy what he wants, whereas the holder of any other asset must convert it into the means of payment before he can buy. As such gold and silver are considered to be excellent money commodities. Share Your PDF File It is possible only if the various units of money are identical. Another quality of good money is that it should be capable of making small purchases. Properties/Qualities/Merits of Good Money: The commodity which is to serve as money should have following properties or qualities: (1) General Acceptability: The most important property of money is this that it should be generally acceptable. An important quality of money is its acceptance. Good money requires acceptance to all without any hesitation. Top eight qualities of an ideal money material are: 1. If I work today and earn 25 dollars, I can hold on to the money before I spend it because it will hold its value until tomorrow, next week, or even next year. The cost of printing currency notes and minting coins must be lower. The ideal money commodity should, as such, possess utility, portability, durability, homogeneity, divisibility, malleability, Cognoscibility and stability of value. Gold and silver are generally acceptable to all without any hesitation because they are used for ornamental and other purposes and can be easily sold as bullion, besides being used for monetary purposes. The qualities of good Money, are as under. It enables a person to make small purchases. Divisibility 6. Match. Portability 3. One of the qualities of a good money material is that it can be stored for a longer period of time without loosing value to meet the future needs. This is one of the easiest ejections a ref will ever make. Conclusion:- After discussing the essential qualities of a good money material, we find that so far not a single commodity has been … It should also possess the attribute of impressionability so that it may easily receive the impressions. Because of this feature of money, it makes it pretty easy for many to identify counterfeit currency. Our mission is to provide an online platform to help students to discuss anything and everything about Economics. 5 Qualities of a Blog That Makes Money June 9, 2020 by Kai Magsanoc In April 2020, the International Monetary Fund (IMF) declared that the world economy will go into recession, “the worst since the Great Depression” from 1929 to 1933. A commodity fit to be used as money must be such that it can be easily and economically transported from one place to the other. What are the characteristics of money or the qualities of good money? Durability: Money should be durable. Money is a powerful tool if you know how to use it. As a medium of exchange, money has to be continually handed about; and it will cause great inconvenience if every person receiving it has to scrutinise, weigh and test it. Since the law declares Money as the legal tender, it … Silver coins are not equally lasting but wear out fairly slowly. General Acceptability 2. This is not the case with precious metals. Only a few textbook authors (Colander 1995 and Sloman 1994) mention qualities of money while Melotte and Moore (1995) claim that a good money must be divisible, portable, durable, and stable in value. 4 Comments. Malleability 7. Paper money is considered good money as it can be shifted easily from one place to another. Money can be exchanged for goods, services and labor. What are the characteristics … 1. A thousand rupee note can be changed into the notes of small denominations. it can be broken down into smaller denominations; Hard to counterfeit - i.e. Portability The precious metals, gold and silver by and large, possess the above mentioned qualities of good money material. PLAY. Their portions can be melted and remelted together any number of times without much loss. An ideal money material should possess the following qualities: It is the very essence of money. Divisibility 6. PROTECT YOURSELF, and do it NOW! The money material should be capable of being melted, beaten and given convenient shapes. Following are the qualities of good money: General acceptance. High Value: The money material should possess high value in small bulk, so that it can be conveniently carried and handled. NOTE : Anything that is generally acceptable as a means of exchange for goods and services bought is money. “It must not evaporate like alcohol, nor purely like animal substance, nor decay like wood, nor rust like iron. An ordinary person should be able to judge the correctness of money. If the money used is perishable it will lose its value in few days. people can carry it around with them on a daily basis. Explain the characteristics required by money if it is to carry out its functions effectively. I believe, if you can adopt these qualities, it is possible you perform better in blogging than before. If its own value is not stable, how can it measure the values of other goods properly? Money has all the characteristics below. 13 - Most economists believe that the better fiat money... Ch. An ordinary person should be able to judge the correctness of money. Commentdocument.getElementById("comment").setAttribute( "id", "ad57099b9e1279cf3466eba2a3070b31" );document.getElementById("bb9a5a46ca").setAttribute( "id", "comment" ); Save my name, email, and website in this browser for the next time I comment. Money is anything that is generally acceptable as a medium of exchange, common measure, store of value, … 13 - What are six qualities of the ideal money? The essential quality of good money is that it should be acceptable to all, without any hesitation in the exchange for goods and services. It means money must be a thing of continued use. It practically happened in Kuwait during the gulf war, when people refused to accept Kuwaiti Dinars in payments. Gold and silver coins are more durable as compared to paper money. Money is a medium of exchange; it allows people to obtain what they need to live. it needs to last; Portable i.e. While a deeper look at money did raise many questions, there are at least some foundational truths that can be discerned about money.. For example, many economists and experts in the field agree that money must be a medium of exchange, a unit of account, and a store … The main quality of good money is its general acceptability. Ch. First: Money is a store of value. However, changes in the quality of money have been widely neglected. Money is often in the forms of coins and paper. It should not deteriorate rapidly with the passage of time. Economical: The good money material has economical quality. The people accept even fiat money (money issued without keeping any metallic reserves) due to the government support. They've found that people who are good with money are generally goal-driven, value-driven, accountable, and efficient. Food, water, copper, salt, real estate, anything that has value. Terms in this set (5) Divisibility. It should be commonly acceptable for the sale and purchase of goods and services. Share Your Word File The value of money should not depreciate with the passage of time. Any commodity which lacks this quality can not be accorded as money. Fluctuating standard of value is just like a changing yard or kilogram. General Acceptability 2. In order that a commodity may be used as a measure of value, it is essential that its units are similar in all respects. Durability is one of the most important qualities of money. However, in economics, money is taken in a broader sense. The money system cannot last for a longer period if it is too much costly. Scarcity: A good money material must be scarce in quantity or the way to obtain money issued must kept low as compared to the desire for it. Write. This quality of money makes best use of money possible. Ch. This lecture contains the functions of money and qualities of good money material. The textbook by Abel, Bernanke, and Croushore (2008) does not even discuss the qualities of money at all. Money is homogenous. Properties/Qualities/Merits of Good Money: The commodity which is to serve as money should have following properties or qualities: (1) General Acceptability: The most important property of money is this that it should be generally acceptable. This paper analyzes changes in the quality of money and its influence on the purchasing power of money. All portions or specimens of the substance used as money should be homogeneous, that is, of the same quality, so that equal weights have exactly the same value. New York, Pageant Press [1956] (DLC) 56008704 (OCoLC)1154146: Material Type: Document, Internet resource: Document Type: Internet Resource, Computer File: All Authors / Contributors: Arthur Kemp Test. And this implementation has a vital role in the business environment. Spell. The paper money is easier to carry because it has less weight than metallic money. In this article we are going to take a look at some of the major characteristics or features of money. Created by.

qualities of money

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