ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Limited supply. In order to maintain its value, money must have a limited supply. While the supply of cows is fairly limited, if they were used as money, you can bet ranchers would do their best to increase the supply of cows, which would decrease their value.

Detailed explanation-2: -in fact, a variety of items have been used as money over the centuries. The items that worked the best tended to have four basic characteristics: portability, divisibility, durability, and acceptability.

Detailed explanation-3: -Stability. Of all the qualities of good money, stability is probably the most essential one. The value of money cannot change for a long period of time and hence remain stable. If the value of money keeps changing, then it will fail to function as a measure of value and as a standard of deferred payment.

Detailed explanation-4: -Money is often defined in terms of the three functions or services that it provides. Money serves as a medium of exchange, as a store of value, and as a unit of account. Medium of exchange. Money’s most important function is as a medium of exchange to facilitate transactions.