Hi friends, in today’s article we are going to know about full bodied money meaning or meaning of standard money. So let’s discuss in details.
What is Full bodied Money?
Standard money or full bodied money refers to that money whose face value (the value specified upon it) is equal to intrinsic value (the value of its component material). Standard money requires the fulfillment of two conditions –
• Money can be shifted from monetary to non monetary uses without any cost.
• The metal can be coined into money without limit and without cost.
Distinguish between Full bodied money and Token Money
The difference between standard money and token money are given in the following ground –
(i) The face value of full bodied money or standard money is equal to its intrinsic value, whereas the face value of taken money is more than its intrinsic value.
(ii) Standard money are made of gold or silver of a well-defined weight, purity and fineness. On the contrary, token money are made of inferior metals such as copper, aluminum, nickel, etc.
(iii) There is free coinage of standard money and the mint is open to the public. But, token money is minted by the government and there is no free coinage of it.
(iv) Standard money is unlimited legal tender. On the other hand, token money is limited legal tender.
Mention advantage and disadvantages of Full bodied Money
Standard money or full bodied money has various advantages and disadvantages which are mention below –
Advantages or Merits
• They inspire higher confidence in the holder,
• They provide an excellent means of storing purchasing power,
• There is no fear of inflation,
• They posses easy acceptability abroad.
Disadvantages or Demerits
• They are non-economical as they cost the same as their market value,
• They are less elastic in their supply which is always limited tot he stock of precious metal,
• They cause wastage of precious metal.
So friends, this was the concept of standard money. Hope you get the full details about it and hope you like this article.
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