Distinguish between Full bodied Money and Token Coins.
(i) Standard or full-bodied
money:
Any money whose face value (exchange value) is equal to its
intrinsic value (the worth of the metallic content of money) is called standard
money. Full-bodied money requires the fulfillment of two conditions:
(a) Money can be shifted from monetary to non-monetary uses
without any cost; and
(b) The metal can be coined into money without limit and
without cost. There is free coinage of standard money and the mint is open to
the public. It is unlimited legal tender and money of account of a country.
Standard coins are generally made of gold and silver.
(ii) Token coins:
These refer to small coins of various denominations,
which are issued to facilitate day-to-day requirements of the people. All
Indian coins, like those of Rs 10, 5, 2 or 1, are token coins since their value
as money is more than value of metal contained in them.
(i) Standard or full-bodied money:
Any money whose face value (exchange value) is equal to its intrinsic value (the worth of the metallic content of money) is called standard money. Full-bodied money requires the fulfillment of two conditions:
(a) Money can be shifted from monetary to non-monetary uses without any cost; and
(b) The metal can be coined into money without limit and without cost. There is free coinage of standard money and the mint is open to the public. It is unlimited legal tender and money of account of a country. Standard coins are generally made of gold and silver.
(ii) Token coins:
These refer to small coins of various denominations, which are issued to facilitate day-to-day requirements of the people. All Indian coins, like those of Rs 10, 5, 2 or 1, are token coins since their value as money is more than value of metal contained in them.
