Characteristics of Money

For money to be most effective, it has to be:

1. Widely accepted for goods and services for a long time
2. Durable: able to withstand being used repeatedly (so we can’t use wheat, corn or rice)
3. Easy to carry
4. Divisible into smaller units of value (so artwork wouldn’t work)
5. In limited supply- this is why we don’t use aluminium or iron
6. Uniform – all versions of same denomination must be able to buy the same amount
7. Valued in itself- this is why we don’t use ordinary paper