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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.
Wiki User
∙ 12y ago
Wiki User
∙ 13y agosome disadvantages of commodity money are its not portable, durable, or divisible, it usually works in small economies
Wiki User
∙ 9y agoThe disadvantages of commodities or money are it is durable, divisible and not portable. It only works on small economies and does not have any business monopoly.
Wiki User
∙ 13y agosome 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
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.
What is Commodity-backed money?
Commodity-backed money is just what it sounds like: it's a currency where every unit of money--dollars, say--is backed by a stated amount of a commodity held in reserve by the government.
What is the difference between representative money and commodity money?
A) Commodity money consists of objects used as money that contains their own value, but representative money is a specific group of the commodity objects. B) Commodity money consists of objects that have value in and of themselves, but representative money makes use of objects because the holder can exchange them for something else of value. C) Representative money allows objects to be exchanged for something else, but commodity money has value because the government decreed it is an acceptable means to pay debts. D) Representative money consists of objects that have value in and of themselves, but commodity money makes use of objects because the holder can exchange them for something else of value The answer is B.
What are disadvantages of commodity money?
some disadvantages of commodity money are its not portable, durable, or divisible, it usually works in small economies
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
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
Why is representative money more useful than commodity money?
What is the difference between commodity money and representative money
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.
What is Commodity backed money?
Commodity-backed money is just what it sounds like: it's a currency where every unit of money--dollars, say--is backed by a stated amount of a commodity held in reserve by the government.
What is Commodity-backed money?
Commodity-backed money is just what it sounds like: it's a currency where every unit of money--dollars, say--is backed by a stated amount of a commodity held in reserve by the government.
What are the different types of money?
4 types of money... Commodity money, Receipt money, Fractional money, Fiat money
