|
Why not use seashells?
Seashells, animals' teeth, rare stones or even bricks of dried tea have all been used as money in different cultures. Theoretically, any material can serve as money as long as it fulfils three conditions. Firstly, it must be accepted as a means of payment by everyone doing business together. Secondly, people must have confidence in the value of the chosen material. And finally, the material must be scarce, since only a scarce good has any value. That is why sand is hardly suitable as money, whereas gold and silver, for example, are.
So money must be scarce, but not excessively so. In an efficiently functioning economy there must always be enough money available to ensure that the goods on offer can be bought and sold in unhindered trading. One important function of the National Bank is to supply the economy with the correctly measured amount of money.
|
|
|
 |
|
|
The three conditions for any form of money are general acceptance, confidence in its value and availability in the right quantity.
|
|
