Which property the paper money does not possess:
Correct answer: Durability
The ability of an item to withstand wear and tear over time is called durability. Paper money is more susceptible to damage than metal coins because it is made of paper or a combination of paper and other materials. Paper money can deteriorate due to frequent handling, moisture, and other environmental factors.
In spite of the fact that modern banknotes are designed with specific security features and materials to improve their durability, they are still less durable than metal coins. The central bank may have to replace banknotes that have been torn or excessively damaged over time.
Considering that paper money is less durable than metal coins, the correct answer is (c). Other options, such as acceptability, divisibility, and portability, make paper money a practical and widely used form of currency.
Why the other options are not correct
Paper money has the quality of acceptability, meaning that it is widely recognized and accepted as a medium of exchange within a country’s economy. Paper money is backed by governments and financial institutions, giving it legitimacy and trustworthiness.
Paper money is highly divisible, meaning it can be divided into smaller denominations. This divisibility allows people to make precise transactions, even for small purchases. A customer can, for example, pay with a $10 bill for a $5 item, and receive the change back.
Paper money is highly portable, making it easy to carry around. Paper money is lightweight and convenient to use on a daily basis, unlike other forms of currency like precious metals, which can be bulky and heavy. As a result of this portability factor, paper money has become widely used in modern economies.
While paper money has a number of important characteristics, including acceptability, divisibility, and portability, it lacks durability. Paper money has a relatively short lifespan, which means it must be reprinted frequently, which is an ongoing cost for governments and central banks. Despite this limitation, paper money continues to be an essential part of economies worldwide, functioning as a widely accepted and easily transportable medium of exchange.