Money is a store of value (or wealth), a medium of exchange as well as a unit of account. In order for money to be effective in the above it has to have the following properties:
divisible – should be divisible in smaller units
portable – able to carry it around therefore a high value should be able to be contained in a small space and weight
homogenous – one unit should be the same as any another unit
durable – should not be able to be easily destroyed or eroded
valuable – should have intrinsic value, normally because it is desirable. Should not be able to be created or discovered without reasonable effort (normally a commodity itself).
Gold has all the above properties. It is for this reason that gold has been used as money for centuries. It is for this reason that central banks hold gold as part…
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