Question

Identify and describe the five standards for a useful form of money.

Answer 1

The standards for a useful form of money are as follows:

a) Durability:

Useful form of money is capable of being used for a long period of time. For example, coins last for a several years.

b) Stability:

The value of money is agreed by everyone. Hence there are hardly any fluctuations. The value is relatively stable.

c) Divisibility:

Money can be broken into different denominations. Each denomination represents a different value.

d) Uniqueness:

It is difficult to copy minted coins which are elaborately designed.

e) Portability:

It is relatively easy to carry coins and paper money