ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Hard money is money that is based on a valuable commodity, such as gold or silver. Since the supply of these metals is limited, these currencies are less susceptible to inflation than soft money such as printed banknotes.

Detailed explanation-2: -Examples of commodity money are gold and silver coins. Gold coins were valuable because they could be used in exchange for other goods or services, but also because the gold itself was valued and had other uses. Commodity money gave way to the next stage-representative money.

Detailed explanation-3: -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.

Detailed explanation-4: -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-5: -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.