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. However, for the purposes of economics, money actually has three distinct uses, some of which are not adequately covered in the above definition. It is possible only if the money is divisible into small units. The proper designs are made on it. Possession of money enables one to get hold of almost any commodity in any place and money never locks a buyer. The hero loses favor with gods.
It is also an important feature of a money economy that incomes are received and measured in terms of money. Malleability - money should be Malleable so that it could be made into new money. To serve as a good medium of exchange and to be a good standard of deferred payment and to serve as an efficient store of value, the value or purchasing power of money must be stable. There is also these types out of these the Money Market Savings account which permits usually up to 3 withdraws per quarter and the Money Market Checking Account that permits up to 6 with draws per quarter. It has led to the creation of financial institutions. Malleability: The money material should be capable of being melted and put to different forms.
It explained that a movement of interest rates implies significant changes in the capital value of many assets held by financial institutions. If he donates the money to charity, he is doing a lot of good. Empirically, they forged a link between the stock of money and output via the rate of interest. Stability of Value: Money should not be subject to fluctuations in value. Newlyn calls this the asset function of money.
The characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability. In India, the development ofcommercial banking is uneven and not adequate. If such a farmer were not available, the plumber would have to figure out how to trade his services for something that the farmer wanted so that the farmer would be willing to sell food to the plumber. There can be no pricing process without a measure of value. It leads to unhealthycompetition among the segments. Spending is not limited to cash or money in the bank but to the amount of money people think they can get hold of either by selling an asset or by borrowing or by receipts of income from, say, sales.
In fact, without money, every transaction would require me to find producers who would exchange their goods and services for bassoon performances. Uniformity establishes a standard for the look of various denominations. So, 2 charactersitics that I can share here. The use of money as a unit of account in a monetised economy is a great technological improvement over the barter system. It should be neither too hard nor too soft. In contrast, people are more than willing to accept 20-dollar bills. It serves as a store of value because it has purchasing power and its exchange utility can be used at any time.
Durability - It should last a long time. Further, by excluding them from the definition of money, the Keynesians place greater emphasis on the interest elasticity of the demand function for money. You can think of money as a yardstick-the device we use to measure value in economic transactions. But in recentyears Reserve Bank of India is making all efforts to bring down thediversity in interest rates. The characteristics of money can be divided into six different categories: Durability, portability, divisibility, uniformity, limited supply, and acceptability. The main aim of a consumer is to maximise his satisfaction by spending a given sum of money on various goods which he wants to purchase.
But the borrowers are large innumber. Durability - It should last a long time 3. In other words, it must possess high value in small bulk. Lack ofco-ordination among various segments of money market is alsoresponsible for diversified money rates of interest. So Friedman gives two types of definitions of money. He is enlightened at the end of the story, meaning he realizes where he went wrong, he is humble, and he accepts the consequences.
Characteristics of Good Money 1. Keynes places great emphasis on this function of money. Money has simplified the borrowing and lending operations and encouraged capital formation. This function of money facilitates trade and helps in conducting transactions in an economy. Secondary Functions: Money performs three secondary functions: as a standard of deferred payments, as a store of value, and as a transfer of value. This quality induces the people to have more and more money for meeting their basic necessities of life.