What does it mean to say that money is divisible? There is a limited supply of money available. Money is easy to carry from place to place. Larger denominations of coins and bills can be exchanged for smaller denominations. Money is accepted as a way to make a payment anywhere in the U
Answers
Money refers to a unit that is used as a means of exchange of goods and services in an economy. The value of money is a reflection of several features that determine its value and it's utility is rated on several factors including whether it is transportable, stable, or uniform.
The reason money needs to be divisible is actually very simple and quite logical. To start with, divisibility is one of the four properties that makes a commodity, i.e., something of use or value, into exchangeable money.
Four Properties of Money
Durability: Maintains physical characteristics over time, like rocks or metals.
Transportability: Easily and conveniently taken with a person from one place to another and given from one person to another.
Noncounterfeitability: Cannot easily be duplicated by unauthorized persons, which is why Caesars in Rome (rulers everywhere) required their likenesses, i.e., their portraits, to be imprinted on the metal coin of the realm.
Divisibility: Readily made available in varying increments, e.g., (mixing American and English money values) halfpenny, penny, nickle, farthing, quarter, shilling, half-dollar, crown, in order to be easily exchangeable for items as small as a bread roll, as big as a breadbox, as large as a bread oven or as huge as a cargo ship--and a cargo of bread.
So, the reason money needs to be divisible is because in order for a commodity (something of use or value) to be used to buy and sell our daily, short-term or long-term needs and wants, like food, eyeshadow, aftershave, college tuition etc.