#function-of-money #globo-terraqueo-session #has-images #monetary-policy #money #reading-agustin-carsten
Because precious metals like gold had a high value relative to their bulk and were not perishable, they could act as a store of wealth
. However, their ability to act as a store of wealth not only depended on the fact that they did not perish physically over time, but also on the belief that others would always value precious metals. The value from year to year of precious metals depended on people’s continued demand for them in ornaments, jewellery, and so on. For example, people were willing to use gold as a store of wealth because they believed that it would remain highly valued. However, if gold became less valuable to people relative to other goods and services year after year it would not be able to fulfill its role as a store of value
, and as such might also lose its status as a medium of exchange.