ABSTRACT
This chapter explores some determining influences on the purchasing powers of money. In an economy of self-sufficiency the choice as to what one produces is determined by his personal wants. In an economy of interdependence and trade, the choice as to what one produces is determined by abilities and aptitudes. The producers offer their several products for sale upon the market, these same producers become consumers, buying in the market such necessities, comforts, and luxuries as their desires, fancies, or caprices may dictate. Money is a standard or common denominator of value or, more accurately, a standard of the relative prices of goods. An essential quality of good money is stability, because movements in the purchasing power of money are always troublesome. Money should be elastic in order that it may be adjusted to the varying needs of trade.
