ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Examples of commodities that have been used as media of exchange include gold, silver, copper, salt, peppercorns, tea, decorated belts, shells, alcohol, cigarettes, silk, candy, nails, cocoa beans, cowries and barley.

Detailed explanation-2: -Commodity value of money refers to value of the commodity (like metal) that the money is made of. Thus, if coins are made of gold or silver (as was the practice in old days), commodity value of money refers to the market value of the gold or silver contained in the coin.

Detailed explanation-3: -Commodity Money: Commodity money is that money whose face value is equal to its commodity value. In other words, face value of the money like coin was equal to its intrinsic (commodity) value. It is also known as full-bodied money.

Detailed explanation-4: -For full-bodied money, the money value and commodity value of the money are equal in the market.

Detailed explanation-5: -Commodity money is also know as standard money because it is the monetary unit which is approved by the government to act as the legal tender in the currency system and in which other types of money in the economy like bank draft, promissory not etc. is convertible.