9 Characteristics of Money are listed and explicated herein. We do hope you find it informative and able to satisfy your research demands.
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Anything that is generally acceptable by everyone as a means of exchange for goods and services is what is generally referred to as ‘Money’. Sometimes, money can be in cash or kind, depending on the state at which it is offered.
In this expository article, we will look at what makes something be called money, invariably, the features or qualities we find in a means of exchange that could lead to us calling it money.
9 Characteristics of Money
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Some of the Qualities or Characteristics of Money are:
1. General acceptability
Money must be something that is generally acceptable by everyone in the society or country as a medium of exchange for goods and services.
This usually exposes the level of confidence in people have in money. Everyone accepts it because they can use it too to exchange for other goods and services.
Anything which is usually used as money must be something that can easily be carried around for easy transactions this means that anything which is used as money must be light enough for people to carry about and not something that is heavy such that carrying it in bulk becomes a huge burden to carry around.
Money must be scarce, it must not be seen everywhere and every time because the more money is seen around in the hands of people, it loses value gradually. This is why the currency of some countries has a higher value than the currency of other countries.
Currencies always take a universal shape size and color. It is out of place for a currency to appear differently irrespective of the place it may be found, it must have the same semblance irrespective of the place where it may be. Its quality also must be of a high standard and value nationwide.
In the 21st century, whatever is used an object that will serve as money must be able to last long, it must stand the test of time and must not be a commodity that can perish over time, it must be able to stand the test of time.
The value of money must be Stable it must not be something that shrinks, it must not follow the trend of the economy and change in its stability.
The stability of the value of money will help the business to be predictable and encourage giving in and lending out of money.
Money must be capable of being divided into smaller units, e.g. N100, N50 and N20, N10, N5, etc. in order to enhance the purchase of commodities that are both high and low prices.
8. It must be recognized
Money must be easily recognized and identified by the totality of every person in the society where it is circulated. It must be of high quality in order for it not to be easily counterfeited.
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9. No intrinsic value
Whatever commodity it is that is used as money must on its own little or no value as opposed to its value of the exchange.