Why is it important for money to be both portable and divisible? 

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reidalot eNotes educator| Certified Educator

For money to be used practically, it must be both portable and divisible: portable meaning that it can be carried, and divisible meaning that it can be broken down into smaller denominations.

For centuries, people have used different forms of currency for business transactions. For example, a bushel of corn could be traded for a sack of sugar. Even rock salt has been used as currency: it was cut into bricks, making it divisible. Cattle posed a different problem as currency, as their portability is limited and their divisibility nonexistent. These examples illustrate the use of commodities as currency. However, as time progressed, silver and gold became a better form of currency in terms of portability and divisibility.

In the modern world in developed countries, we use currency in the form of bills (paper money) and coins. Both are easily carried; paper money is even easier to carry than coin. Both are also divisible. For example, a US dollar can be divided into quarters, dimes, nickels, and so on. Another form of modern currency is a credit card. The credit card represents actual dollars and coins. It is very portable and is divisible, as the credit card holder can be charged for a purchase down to the exact penny.

Lori Steinbach eNotes educator| Certified Educator

Throughout history, many things have served as money (currency), including shells, animals, grains, and even tea. Eventually most societies settled on silver and/or gold as the foundation for their currencies. Money, as opposed to commodities such as those mentioned above, must be both portable and divisible. 

Money must be portable because it has to be carried with the consumer in order to effect a trade. A pig, for example, is not a feasible form of money (currency) because it is unwieldy. 

Money must also be divisible in order to facilitate many different kinds of transactions. That same pig, for example might work as currency when buying an item which matches the value of the animal; however, if one wanted to purchase, say, a pack of gum, it is impractical to subdivide the pig for such a small item. 

Several other considerations when determining an feasible form of money include relative rarity (in order to maintain the value of the currency), non-consumability (such as water or oil, which are consumed and therefore no longer spendable), and durability (reliability over time).