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some disadvantages of commodity money are its not portable, durable, or divisible, it usually works in small economies
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What are the Four main disadvantages of commodity money?
some disadvantages of commodity money are its not portable, durable, uniform or divisible, it usually works in small economies
What are commodities of money?
some disadvantages of commodity money are its not portable, durable, or divisible, it usually works in small economies
Disadvantages of Commodity money?
There are two. One is, there can never be more money than there are commodities to cover it. If you decide that one dollar is equal to one gram of gold, and there are only 1 million grams of gold in the world, there can only ever be 1 million dollars. The other is, if you can find more of the commodity you can destabilize the financial system. Money gains worth through scarcity. If gold is 1 gram = $1, and you find a vein of gold with 1 million grams of gold in it, you have just made all the money in the world half as desirable as it was before.
What are the three forms of money?
The three forms of money are commodity money (like gold and silver), fiat money (issued by a government and not backed by a physical commodity), and representative money (backed by a physical commodity, but can be exchanged for that commodity).
Was wheat used as commodity money by the American colonies?
where was salt used as commodity money
What is an example of commody money?
The term you are looking for is commodity money. Some examples of commodity money are gold and silver.
Which is most accurately explains why commodity money has value?
A commodity is a good that is worth money, there is no such thing as "commodity money". So if you have a good that was purchased from a vendor that is by definition a commodity, its value is whatever you paid for it, my suggestion is a mark up and that is its profit.
Why does commodity money have value?
commodity money is a good that can be used as a medium of exchange or for some other purpose
How does representative money compare to commodity money?
Representative money is a type of currency that represents a claim on a commodity, such as gold or silver, allowing holders to exchange it for that commodity, while commodity money is actual physical goods with intrinsic value, like gold coins or silver bars. Unlike commodity money, representative money does not have intrinsic value itself; its value is derived from the trust that it can be exchanged for a specific amount of a commodity. This distinction allows representative money to be more flexible and practical for everyday transactions.
4 similarities between money & commodity?
What is the difference between money and commodity? Commodity money is a sort of money that is considered as a present good. Whereas, fiat money is a future obligation as it is simply a promise to pay in the future. Payment is never made when it comes to fiat money, instead it is only discharged. But commodity money, on the other hand, completes the transaction.
How do representative and credit money compare to commodity money?
Representative and credit money differ from commodity money primarily in their intrinsic value and backing. Commodity money has intrinsic value, as it is made from a physical commodity (like gold or silver) that holds value on its own. In contrast, representative money is backed by a promise to exchange it for a commodity, while credit money, like banknotes or digital currency, derives value from trust in the issuing authority rather than any physical commodity. Both representative and credit money facilitate transactions more efficiently than commodity money by not requiring the direct exchange of physical goods.
Why is representative money more useful than commodity money?
What is the difference between commodity money and representative money
