Suppose you have a $1 silver eagle United States coin. This coin is made up of 1 ounce of 99.99% pure silver. (The other .01% is zinc to strengthen the coin)
1. Explain how this coin meets each of the 6 characteristics of money.
The six characteristics of money are durability, portability, divisibility, uniformity, limited supply, and acceptability. Let's analyze how the $1 silver eagle United States coin meets each of these characteristics:
1. Durability: The silver eagle coin is made of 99.99% pure silver, which is highly durable and resistant to corrosion and wear. This ensures that the coin can sustain its value over time and remain as a medium of exchange.
2. Portability: Being a coin, the silver eagle is relatively small and lightweight, making it easily transportable. Its compact size allows for convenient carrying and use in day-to-day transactions.
3. Divisibility: The silver eagle coin, valued at $1, can be further divided into fractions without losing its value. It can be exchanged for multiple coins or combined with other forms of currency to achieve smaller denominations, enabling flexible transactions.
4. Uniformity: All silver eagle coins have the same specifications, weight, and purity, ensuring uniformity and consistency in terms of value across different coins. This makes it easier for people to recognize and accept them as a standardized form of money.
5. Limited supply: The silver eagle coin's production is under the control of the United States Mint, which limits its supply. This limited availability helps maintain its value and prevent inflation.
6. Acceptability: The silver eagle coin is recognized and accepted as a form of legal currency in the United States. It can be used to purchase goods and services at numerous establishments nationwide, as well as being tradable in the broader market for silver.
In summary, the $1 silver eagle coin meets all six characteristics of money. It is durable, portable, divisible, uniform, has a limited supply, and is widely accepted as a form of payment, making it a valuable medium of exchange.
To determine how this coin meets each of the six characteristics of money, we need to examine its qualities and functions.
1. Durability: A coin made of silver is highly durable. Silver is resistant to corrosion and can withstand the test of time. This makes it suitable for long-term use as a form of money.
2. Portability: Being an ounce, the silver eagle coin is relatively compact and easy to carry. This allows for convenient transportation and exchange.
3. Divisibility: The coin's denomination, being a $1 silver eagle, suggests that it can be easily divided into smaller units. If needed, the coin can be exchanged for smaller denominations without any loss of value.
4. Uniformity: As a standardized United States coin, the silver eagle follows a consistent design, weight, and purity. This ensures that each coin is identical, making it easily recognizable and accepted as a reliable form of money.
5. Limited Supply: The silver eagle coin being made of pure silver is subject to a limited supply. This scarcity adds value to the coin, making it desirable and acceptable in the market.
6. Acceptability: The United States silver eagle coin is recognized and accepted as legal tender within the United States. It can be used to settle debts, make purchases, and exchange for goods and services.
In conclusion, the $1 silver eagle coin meets the characteristics of money by being durable, portable, divisible, uniform, having a limited supply, and being widely accepted.
Sure! Let's go through each of the 6 characteristics of money and explain how the $1 silver eagle coin meets them:
1. Durability: Money needs to be able to withstand wear and tear over time. The silver eagle coin is made of silver, which is known for its durability. Silver is resistant to corrosion and can maintain its value and physical integrity over long periods.
2. Divisibility: Money should be easily divisible into smaller units to facilitate transactions of varying values. The silver eagle coin can be divided into smaller units or fractions based on weight. For example, one can divide the coin into half ounces or quarters to accommodate transactions of different amounts.
3. Portability: Money should be easy to carry and transport. The silver eagle coin, weighing 1 ounce, is relatively lightweight and compact, making it convenient to carry in a wallet or pocket. Its size allows for easy transportation and portability.
4. Uniformity: Money needs to be standardized so that each unit is the same as others within the same denomination. The silver eagle coins are minted according to a standardized design, weight, and purity. Each coin has the same specifications, ensuring uniformity in value and acceptance.
5. Limited Supply: Money should have a limited supply to maintain its value. The production of silver eagle coins is regulated by the U.S. Mint, which controls the quantity of coins released each year. This limited supply helps preserve the value of the coin and ensures it retains its purchasing power.
6. Acceptability: Money must be widely accepted as a medium of exchange. The silver eagle coin is recognized as legal tender in the United States, and it is widely accepted for transactions in various industries, including retail, entertainment, and services.
By fulfilling these characteristics, the $1 silver eagle coin serves as a form of money, enabling economic exchanges and acting as a store of value.