Search results
Results from the WOW.Com Content Network
In commodity money, the coin retains its value if it is melted and physically altered, while in a fiat money it does not. Usually, in a fiat money the value drops if the coin is converted to metal, but in a few cases the value of metals in fiat moneys have been allowed to rise to values larger than the face value of the coin.
Money is well-suited to storing value because of its purchasing power. [3] It is also useful because of its durability. [4] Because of its function as a store of value, large quantities of money are hoarded. [5] Money's usefulness as a store of value declines if there are significant changes in the general level of prices. [6]
Under Gresham's law, "good money" is money that shows little difference between its nominal value (the face value of the coin) and its commodity value (the value of the metal of which it is made, often precious metals, such as gold or silver). [4] The price spread between face value and commodity value when it is minted is called seigniorage.
The alternative to a commodity money system is fiat money which is defined by a central bank and government law as legal tender even if it has no intrinsic value. Originally fiat money was paper currency or base metal coinage, but in modern economies it mainly exists as data such as bank balances and records of credit or debit card purchases, [3] and the fraction that exists as notes and coins ...
In the reified perception of the political economists and the vulgar Marxists, products have value because they are expressible in money-prices, but Marx argues [201] that in reality it is just the other way round: because commodities have value, i.e. because they are all products with an average current replacement cost of social labour, [202 ...
Many cultures around the world developed the use of commodity money, that is, objects that have value in themselves as well as value in their use as money. [48] Ancient China, Africa, and India used cowry shells. [3] The Mesopotamian civilization developed a large-scale economy based
A strong economy makes oil investments more profitable because people are likely to consume more oil. Young points to the COVID-19 pandemic and how it caused major fluctuations. We saw oil demand ...
In metallist economic theory, the value of the currency derives from the market value of the commodity upon which it is based independent of its monetary role. Carl Menger (1840–1921) theorized that money came about when buyers and sellers in a market agreed on a common commodity as a medium of exchange in order to reduce the costs of barter ...