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Today, money comes in many different forms. When you go to purchase something at a store, you pay money in the form of cash, a check, a credit card, or a debit card. Some people even have payment apps on their smart phones.

Now imagine paying for a pizza with seeds ... yes, seeds. What if everything was paid for by using seeds? How would this change the world we live in?

In Holland during the 1600s, tulip bulbs were very valuable. So valuable, in fact, that they were sometimes used as money. Try to imagine a tulip bulb, the seed of a tulip, being worth 4,000 gold pieces. During this time in history, tulip bulbs in Holland were more valuable than some homes. From our modern perspective, this sounds ridiculous. However, it is true.

Identify at least three potential problems with using tulips as a form of currency.

Answer :

anthougo

Three potential problems with using tulips (commodity) as a form of currency are Deterioration, Bulkiness, and High opportunity cost due to their inherent value.

What is a commodity as a form of currency?

Commodity money is a physical good with 'intrinsic value.'  This implies that the commodity can be used outside of its use as money.

Some historic commodity currencies included:

  • Alcohol
  • Cocoa beans
  • Copper, Gold, Silver
  • Salt
  • Sea shells
  • Tea
  • Tobacco
  • Tulips.

While commodity money is durable, divisible, easily exchangeable, and rare, they are subject to the following disadvantages:

  • Deterioration.
  • Bulkiness.
  • Indivisibility.
  • High opportunity cost due to its inherent value.
  • Subject to supply and demand.

Thus, three potential problems with using tulips (commodity) as a form of currency are Deterioration, Bulkiness, and High opportunity cost due to their inherent value.

Learn more about using tulips as a form of currency at https://brainly.com/question/15054880

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