Give reasons "Any commodity cannot act as money".
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Commodity money is money whose valuecomes from a commodity of which it is made. Commodity money consists of objects that have value in themselves (intrinsic value) as well as value in their use as money.[1]
Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, tea, large stones (such as Rai stones), decorated belts, shells, alcohol, cigarettes, cannabis, silk, candy, nails, cocoa beans, cowries and barley. These items were sometimes used in a metricof perceived value in conjunction to one another, in various commodity valuation or price system economies.
Examples of commodities that have been used as mediums of exchange include gold, silver, copper, salt, peppercorns, tea, large stones (such as Rai stones), decorated belts, shells, alcohol, cigarettes, cannabis, silk, candy, nails, cocoa beans, cowries and barley. These items were sometimes used in a metricof perceived value in conjunction to one another, in various commodity valuation or price system economies.
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Any commodity can't act as money.
For something’s to be used as currency it must possess the following qualities:
- General Responsibility: Quality money is the one that is readily done by all without any disinclination.
- Durability: It should possess the standard of durability. That is, it should be big currency. The currency coins are manufacture with metal. These are high durable contrast to currency notes.
- Divisibility: Some commodity will acts as quality money if it can be split into small parts. For Example, gold silver, coins and currency notes.
Learn more about Money:
Explain bartering And commodity money
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Before the evolution of money, commodities exchange for commodities in such situations, how would people have maintained their accounts?
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