Characteristics of Money:

For anything to perform the functions of money outlined above effectively, it must possess the following attributes or qualities.

(i) General acceptability:- It must be acceptable by all economic agents in the country in which it is used in payment for goods and services, and in settling debts and obligations.

(ii) Divisibility: It should be available in units of a standard size sufficiently divisible to facilitate the purchase and sale of goods and services over a wide range of prices.

(iii) Durability: It should be able to last for a long time without losing its value.

This is the reason why high quality papers are used to print paper currency and precious metals are used in minting coins.

(iv) Portability: Money should be convenient to carry about for easy transfer to other people during transactions.

(v) Homogeneity: One unit of money must be the same in all respects (i.e. identical) everywhere throughout the country. This will promote general acceptability.

(vi) Relative Scarcity: It must be unique, not something that can be found easily anywhere. And it must not be supplied in excess so as not to lose its value whereby will not be able to serve effectively as a store of value and a standard of deferred payment.