Characteristics of Money

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Characteristics of Money by Mind Map: Characteristics of Money

1. Divisibility

1.1. Needs to be divided into smaller units

1.1.1. the smaller the divisions the better

1.1.2. can trade cheaper products

1.2. For example:

1.2.1. Mauritius : rupee is divided into 100 cents

1.2.2. Malaysia : ringgit is divided into 100 cents

2. Portability

2.1. Easy to fits in the pocket

2.2. Can bring everywhere

2.2.1. Such movement is needed to complete exchanges

2.2.2. Transportable so it can be used

2.3. Carried with the consumer in order to effect a trade

3. Durability

3.1. Can withstand physical wear and tear

3.2. Retains the same shape over an extended period of time

3.3. If use organic products,it is perishable

3.3.1. Lettuce

3.3.2. Meat

4. Acceptability

4.1. Needs to be generally acceptable

4.2. Used for exchanging goods and services

5. Scarcity

5.1. Needs to be realtively scarce

5.2. If 'grow on trees', money will be worthless

6. Uniformity

6.1. Necessary for each note to be uniform.

6.2. For example, RM5 has to be the same value with another RM5.

6.3. It looks the same,it is worth the same

7. Stability of value

7.1. Money has a reasonable degree of stability of value over a period of time

7.2. Money should not be subject to fluctuations in value

7.3. Inflation will erode the value or purchasing power of money over time