Qualities of Good Money:
Qualities of good Moneyis material should be economical. The cost of printing currency notes a minting of coins must be low. The material of money must be easily available at reasonable prices.
Qualities of good Money are determined by the following points:
- General acceptance
these Money Qualities are discuss below in details;
The very first quality of good money is acceptability, it should be acceptable to all, without any hesitation in the exchange for goods and services.
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It is also an important quality of good money that is should be easily transferable from one place to another place or from one people to another, for doing business and making payment. The paper money is easier to carry because it has minimum possible wait than metallic money.
Money should be durable. The money must not lose its value with the passage of time. Metals are most durable as compared to other forms of money. The gold and silver do not wear out quickly but it can be treated as durable due to replacement by the bank.
Another quality of Good money is that which could be divided into small units without losing any value.
Another quality of Money is it should be store-able and it should not be depreciated with time. If the money used is perishable it will lose its value in few days. Paper money has this quality of store-ability.
Money should be durable. It should not lose its value with the passage of time. The gold and silver coins do not wear out quickly and quality of money remains the same.
Good money is recognized either by sight or touch. The printing of notes is secret. The imitation is not possible, because the process of coloring and the quality of paper are always in the hands of central bank. The general public is familiar with the various kinds of notes.
It is important quality of good money that it should be made economically. If there is heavy cost on issuing more money that is not good money. Good money is that has low cost and more supply. Paper money has this quality of economy.
After discussing the essential qualities of a good money material, we find that so far not a single commodity has been exposed which possess all the qualities given above in their entirety. These have been discarded in the past in favor of paper currency and bank money. Some material is yet to be found which can serve as ideal money.