Qualities of Good Money

Anything can be used as money as long is accepted by the society. But there are certain qualities which make money 'good', that is to say, easily accepteable to the government.

Acceptability: The article which is used as money should be acceptable by the people. It has to act as a common nedium of exchange, so it needs to be accepted by the people who will be using it for their day-to-day activities.

Portability: The article should be portable. It is convenient to carry paper notes than a bag of rice. High value in a small bulk is preferred in an article to be used as money.

Cognisability: The article should have some distinct characteristics so that it can easily be recognised as money.

Homogeneity: The article to be used as money should be such that it can be divided into exact fractions or multiples without any waste (or) difficulty. Similarly the smaller parts should be capable of integration into bigger parts.

Durability: Money should be durable. If if fails to withstand the roughness of long use, it cannot be a good money because the holder of it may have to incur losses due to its depreciated value.

Stability: The artcle should be the one whose value cannot be easily manipulated by anyone. Even the monetary authority should be guided by rules so that it cannot manipulate its supply imprudently.