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What are the desirable characteristics of the good used as money? Select all that apply.

Question

What are the desirable characteristics of the good used as money? Select all that apply.

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Solution

The desirable characteristics of a good used as money include:

  1. Durability: The good should not wear out quickly. It should be able to withstand repeated use.

  2. Portability: It should be easy to carry around so that it can be used for transactions anywhere.

  3. Divisibility: It should be easily divisible into smaller units without losing its value. This makes it possible to use it for purchases of varying amounts.

  4. Uniformity: Any two units of the good should be identical to each other. This makes it easy to determine the value of the good.

  5. Limited Supply: The good should not be easily available. This ensures that it retains its value.

  6. Acceptability: Everyone must accept the good as a form of payment.

  7. Stability: The value of the good should not fluctuate drastically. It should remain relatively stable over time.

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