Question
How can money be classified?

Answer

Money can be classified as:
  1. Full-bodied money: It is the money whose value as commodity is equal to its value as money. e.g. Gold, silver.
  2. Representative full-bodied money: It is usually made of paper. It is that money which is fully backed up by gold and silver.
  3. Credit money: It is that money whose value as money is more than the commodity value of the material which is used to make the money. It can be in the form of:
  1. Token coins.
  2. Representative token money.
  3. Circulating promissory notes issued by the Central Bank.
  4. Bank money.

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