ces and everybody
understands these prices and can compare the prices in one list with
those in another. Money may then be said to have two chief functions. It
serves as

(1) #A medium of exchange.#
(2) #A common measure of value.#

But it is important to remember that, though money thus acts in a very
useful and peculiar way, it never ceases to be a commodity. Its value is
subject to the laws of supply and demand already stated (section 73); if
the quantity of money increases, its value is likely to decrease, so
that more money is given for the same commodity, and #vice versa#.

#79. What Money is made of.# As already remarked almost any commodity
may be used as money, and in different ages all kinds of things such as
wine, eggs, olive oil, rice, skins, tobacco, shells, nails, have
actually been employed in buying and selling. But metals are found to
serve much the best for several reasons, and gold and silver are better
for the purpose than any of the other metals. The advantages of having
gold and silver money are evident. Such metals are #portable#, because
they are so valuable that a small weight of metal equals in value a
great weight of corn or timber or other goods. Then they are
#indestructible#, that is, they do not rot like timber, nor go bad like
eggs, nor sour like wine; thus they can be kept for any length of time
without losing their value. Another convenience is, that there is no
difference in quality in the metal itself; pure gold is always the same
as pure gold, and though it may be mixed with more or less base metal,
yet we can assay or analyse the mixture, and ascertain how much pure
metal it contains. The metals are also #divisible#; they may be cut or
coined into pieces, and yet the pieces taken together will be as
valuable as before they were cut up. It is a further advantage of gold
and silver that they are such beautiful, brilliant substances, and gold
is also so heavy that it is difficult to make any counterfeit gold or
silver; with a little experience and care, every one can tell whether he
is getting real money or not--when the money is made of gold or silver.
Finally, it is a great convenience that #these metals do not change in
value rapidly#. A bad harvest makes corn twice as dear as before, and
destructible things, like eggs, skins, &c., are always rising or falling
in value. But gold and silver change slowly in value, because they last
so long, and thus the new supply got in any one