Commodity Money: Definition & Examples Video

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  • 0:00 Definition of Commodity Money
  • 0:30 Examples of Commodity Money
  • 1:45 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Commodity money has been used for thousands of years. In this lesson, you'll learn about commodity money and related concepts. You'll also have a chance to reinforce your knowledge with a short quiz after the lesson.

Definition of Commodity Money

Money is a type of asset in an economy that is used to buy goods and services from other people. A commodity is a physical item that is readily interchangeable with another item of the same type. Commodity money is a commodity that has intrinsic value. Intrinsic value means that the commodity has value even if it is not used as money. In times of economic turmoil, such as severe economic depressions or hyperinflation, people sometimes turn to commodity money instead of the money authorized by their governments.

Examples of Commodity Money

Commodity money has been used throughout history and is even used today in certain circumstances. Let's take a quick look at some examples.

Precious metals and coinage: Precious metals, such as silver, gold, platinum, and copper, have been used since ancient times as commodity money. Ancient coins were made of gold, silver, or other metals. Governments created struck coins, blank coins between two dies, which were struck with a hammer, leaving an imprint. This designated it as coinage produced by the government.

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