Answer:
Money and commodity money are two related but distinct concepts. Money is a medium of exchange used to facilitate transactions, while commodity money is a type of money that has intrinsic value, meaning that the physical material itself has value beyond its use as a medium of exchange.
Here are some of the key differences between money and commodity money:
1. Intrinsic value: Money has no intrinsic value, meaning that its worth is not based on any physical characteristic of the money itself. Commodity money, on the other hand, has intrinsic value because it is made of a valuable commodity such as gold, silver, or salt.
2. Acceptance: Money is widely accepted as a means of exchange, while commodity money may not be as widely accepted because its value is tied to the commodity it is made of.
3. Portability: Money is generally more portable than commodity money because it is lighter and easier to carry. Commodity money, such as gold or silver coins, can be heavy and cumbersome.
4. Stability: Money is generally more stable than commodity money because its value is not subject to fluctuations in the value of the underlying commodity. Commodity money, such as gold or silver, can experience significant fluctuations in value based on changes in supply and demand.
5. Production: Money can be produced relatively easily and inexpensively, while commodity money requires the production of the underlying commodity and the transformation of it into coins or other forms of currency.
Overall, while both money and commodity money can serve as a medium of exchange, money is a more flexible and widely accepted form of currency because it has no intrinsic value and is not subject to fluctuations in the value of underlying commodities. Commodity money, on the other hand, can be more stable in value over time but may be less portable and accepted as a means of exchange.