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Characteristics of Money

The characteristics of good money which is willingly accepted are given below:

(1)    Durability

Money must be durable and not likely to deteriorate rapidly with frequent handling. Bank notes, coins and cheques do not always pass this test to perfection. but they are certainly preferable to some perishable commodity.

(2)   Weight

 Money must be light in weight. From this viewpoint paper money is far better than metal coins. Because f their weight, coins are limited to small change, where weight is no serious drawback.

(3)    Size

Money must be small enough to be easily carried on the person, but not to cause accidental los. Very small gold or silver pieces were easily misplaced, on the other hand, large metallic coins presented real problems when bight amounts of money had to be transferred before bank money came into monetary use.

(4)    Divisibility

Money must be readily divisible into various denominations to facilitate making change, Paper money and coins accomplish this task very well.

(5)    Stability in Value

It the value of money fluctuates violently, it will given rise to many economic and social problems, in that event money may lose its significance. Money should, therefore, be comparatively stable in value. The value of money is maintained best when the amount of money in circulation remains scarce. The proper limits to the volume of money are dictated by the needs of the economy and its stability depends largely on the central coordination and regulation.

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