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Commodity money is money whose value comes from a commodity of which it is made. Commodity money consists of objects having value or use in themselves ( intrinsic value) as well as their value in buying goods. [1]
Jul 4, 2023 · A commodity money is a physical good that has ‘intrinsic value’ – a use outside of its use as money. Historic examples include alcohol, cocoa beans, copper, gold, silver, salt, sea shells, tea, and tobacco. There are four main characteristics of commodity money – it’s durable, divisible, easily exchangeable, and rare.
Dec 28, 2022 · Commodity money is a form of money that is based on a commodity with intrinsic value. That means it is a medium of exchange that is backed by a physical asset, such as gold or silver.
What is Commodity Money? Commodity money is money whose value is derived from the commodity from which it is derived. A commodity is a physical item that can be easily exchanged for another of the same type. A commodity money is a physical good with 'intrinsic value' – a use other than money.
What is Commodity Money? The most basic definition of money is that: ‘anything which acts as money, is money’. In other words, anything that is widely accepted as a medium of exchange to facilitate trade, can be called money. However, this is not an ideal classification as there are several other functions of money.
A brief look at how money has evolved over time from being printed on valuable substances (commodity money), to merely representing those valuable substances (commodity-backed money), to not representing anything at all (fiat money).
Oct 27, 2023 · Commodity money is a form of money that derives an intrinsic value from its underlying commodity and the supply and demand dynamics. Gold and silver have been...
Jan 1, 2018 · Commodity money is a medium of exchange that may be transformed into a commodity, useful in production or consumption. Although commodity money is a thing of the past, it was the predominant medium of exchange for more than two millennia.
Learn about the three main functions of money, how commodity money differs from representative money, and how both differ from today's fiat money.
Commodity money is a medium of exchange that may become (or be transformed into) a commodity, useful in production or consumption. This is in contrast to fiat money, which is intrinsically useless. Download to read the full chapter text. Chapter PDF. Similar content being viewed by others. Commodity Money. Chapter © 2018. Money. Chapter © 2018.
