What are the qualities of Good Money? (2024)

An ideal money should possess the following qualities:

1. General Acceptability:

It is the very essence of money. Unless a person knowsthat the money which he accepts in exchange for his goods or services will betaken without any objection by others as well, he will not accept it.

2. Portability:

A commodity fit to be used as money must be such that itcan be easily and economically transported from one place to the other. Inother words, it must possess high value in small bulk.

3. Indestructibility orDurability:

As money is passed from hand to hand and is kept inreserve, it must not easily deteriorate, either in itself or as a result ofwear and tear.

4. hom*ogeneity:

All portions or specimens of the substance used as moneyshould be hom*ogeneous, that is, of the same quality, so that equal weights haveexactly the same value.

5. Divisibility:

The money material should be capable of division; and theaggregate value of the mass after division should be almost exactly the same asbefore.

6. Malleability:

The money material should be capable of being melted,beaten and given convenient shapes. It should be neither too hard nor too soft.

7. Cognizability:

By it, we mean the capability of a substance for beingeasily recognised and distinguished from all other substances.

8. Stability of Value:

Money should not be subject to fluctuations in value.Fluctuating standard of value is just like a changing yard or kilogram. Thevalue of a material, which is used to measure the value of all the othermaterials, must be stable.