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New Forms of Money

Money becomes...

Question

Money becomes a commodity when intrinsic value of money exceeds its face value. Defend or refute the statement.

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Solution

Yes, the above statement is correct. When intrinsic value of money exceeds face value of money (as it often happened in case of gold and silver coins), money is used as a commodity (implying metal content of money is sold as a commodity).

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Similar questions

When the money value of money exceeds the commodity value of money, it is called:

Q. Consider the following statements:
1) Good money is money that shows little difference between its face value of the coin and its commodity value.
2) Bad money is money that has a commodity value considerably less than its face value.
Which of the statements given above is/are correct?

Commodity value of money has never been greater than the face value (or money value). Is this true?

Q.  Consider the following statements about commodity money:

1. Gold coins can be considered as commodity money
2. Value of commodity money is dependent on intrinsic value of money

 Which of the above are correct?

Distinguish between money value of money and commodity value of money.

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