Theory of money.
Introduction.... Money refers to anything that are generally acceptable as a medium of exchange by the society for settling of debts or making payments for goods and services. In a country, money is a legal tender that is by law it has to be accepted as means of settling debts and exchange of goods and services in the country..
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Qualities of money.
Pin on money. They include.... Acceptability-it should be generally acceptable as a medium of exchange by the society. Scarcity-it should be scarce otherwise it will lose value. Portability-it should be light in weight to ensure that it can be easily carried. Divisibility-it should be capable of being divided into small units to enable purchase of goods whether big or small Durability-it should have the ability to last long as it must not be easily destroyed. Difficult to forge or counterfeit-it should be difficult to make a fake copy so as to prevent an illegal increase in money supply..
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Difficulties of barter trade.... Double coincidence of wants Lack of store of value (perishability of the products) Difficult of transporting some commodities Indivisibility of some items.
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