Following are the characteristics/qualities of good money.
1. General acceptability:
The essential quality of a good money material is that, it would be acceptable to all without any hesitation in exchange of goods and services.
2. Stability in value:
The another attribute of the good money is that, the value of the money should be satiable because money is the standard through which we measure the value of other commodities. If the standard itself is influenced by the changes in the demand and supply than how it can serve as perfect money.
3. Transfer-ability:
Money should be easy to carry. So the cow could be not suitable for this purchase. The attribute of the good money is to transfer one place to another place without any difficulty. So we can say that the material is greater in value but less in volume. In short, metals, coins, currency notes and cheques fully meet this test.
4. store-ability:
The value of money can be easily store in any thing is called good money. For example, gold, silver or paper is ideal for storing. So they are called good money.
5. Divisibility:
The money material should be easily divided into small parts as descried without losing its value. From this point of view, gold, silver and paper money are good money.
6. Informality/homogeneity:
The material used as money must be uniform quality. Otherwise it will not generally acceptable.
Natural goals like grains are seldom of uniform quality currency notes are exactly homogeneous.
7. Cognizability:
Only that material will be considered as good money, which can be easily recognize by the common man. One purchase of making coins out of the metals and giving them a special design to each type of currency note is to make them promptly recognizable.
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