BANKING AFFAIRS

Detailed explanation-1: -For a commodity or currency to be recognized as money, it must be fungible, stable, recognizable, portable, and durable. Different countries around the world use their own monetary systems, which are regulated by a central monetary authority.

Detailed explanation-2: -One advantage of representative over commodity money is that it is easier to use and transport. Instead of hauling around your physical goods, you can instead have a wallet of banknotes that represent some portion of your store of goods.

Detailed explanation-3: -Traditionally, currencies were backed by physical commodities such as silver and gold, but fiat money is based on the creditworthiness of the issuing government. The value of fiat money depends on supply and demand and was introduced as an alternative to commodity money and representative money.

Detailed explanation-4: -In modern economies, the medium of exchange is currency. A currency must remain reasonably stable in value in order for it to work as an intermediary. If its value becomes unstable, it is no longer viable as a means of exchange.