What are the qualities of Good Money?
An ideal money should possess the following qualities:
1. General Acceptability:
It is the very essence of money. 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.
2. Portability:
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. In
other words, it must possess high value in small bulk.
3. Indestructibility or
Durability:
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.
4. Homogeneity:
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.
5. Divisibility:
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.
6. Malleability:
The money material should be capable of being melted,
beaten and given convenient shapes. It should be neither too hard nor too soft.
7. Cognizability:
By it, we mean the capability of a substance for being
easily recognised and distinguished from all other substances.
8. Stability of Value:
Money should not be subject to fluctuations in value.
Fluctuating standard of value is just like a changing yard or kilogram. The
value of a material, which is used to measure the value of all the other
materials, must be stable.
An ideal money should possess the following qualities:
1. General Acceptability:
It is the very essence of money. 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.
2. Portability:
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. In other words, it must possess high value in small bulk.
3. Indestructibility or Durability:
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.
4. Homogeneity:
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.
5. Divisibility:
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.
6. Malleability:
The money material should be capable of being melted, beaten and given convenient shapes. It should be neither too hard nor too soft.
7. Cognizability:
By it, we mean the capability of a substance for being easily recognised and distinguished from all other substances.
8. Stability of Value:
Money should not be subject to fluctuations in value. Fluctuating standard of value is just like a changing yard or kilogram. The value of a material, which is used to measure the value of all the other materials, must be stable.
