List two essential properties that make money a good store of value.

List two essential properties that make money a good store of value.

• A. Durability and maintain purchasing power over time.
• B. Durability and highly volatile in value.
• C. Portable and easily divisible.
• D. Non-counterfeitable and illegal tender.

Answer: (A)

The essential idea is that money works as a store of value when you can save it for the future without it losing worth. The two key properties are durability and maintaining purchasing power over time. Durability means money holds up so you can keep it in savings without it degrading or becoming unusable. Maintaining purchasing power over time means the money doesn’t rapidly lose value due to things like inflation, so what you save today will still buy roughly the same amount of goods tomorrow. While being portable and easily divisible helps with using money day to day, those traits don’t guarantee that its value will be preserved for later. Non-counterfeitable is a good feature, but a form of money that isn’t widely accepted (or is illegal tender) wouldn’t serve as a reliable store of value.

The essential idea is that money works as a store of value when you can save it for the future without it losing worth. The two key properties are durability and maintaining purchasing power over time. Durability means money holds up so you can keep it in savings without it degrading or becoming unusable. Maintaining purchasing power over time means the money doesn’t rapidly lose value due to things like inflation, so what you save today will still buy roughly the same amount of goods tomorrow.

While being portable and easily divisible helps with using money day to day, those traits don’t guarantee that its value will be preserved for later. Non-counterfeitable is a good feature, but a form of money that isn’t widely accepted (or is illegal tender) wouldn’t serve as a reliable store of value.