Question

Describe five features of good money

Answer 1

1. Acceptability: must be acceptable to everyone for it to be used as a medium of exchange
2. Divisibility: Should be divisible into smaller units without loss of value
3. Scarcity: Should be relatively limited in supply so as to maintain value
4. Cognoscibility: Should be easy to recognize fake money
5. Malleability: Easy to print but difficult to forge
6. Homogeneity: Money of the same denomination should be uniform in quality and identical
7. Stability in value: Should be able to last for a long time without changing in value so that it maintains credibility and acceptability. If it fluctuates in value, people prefer holding wealth in form of goods
8. Portability: Should be easy and convenient to carry around
9. Durability: Should be able to last for a long time without getting torn, defaced or losing shape and texture.

Answer 2

Portability
Stability in value
Acceptability
Durability
Scarcity