5. In war time conditions, cigarettes have been used as money. What disadvantage do cigarettes have for trading compared with notes and coins? *

The main disadvantage that cigarettes have over notes or coins is that they wear out more easily.

Explanation:

Cigarettes can fulfill the three functions of money: they can work as unit of account, as store of value, and as medium of exchange.

They are a commodity that is valued by many people, they are easy to carry, and they are easy to manufacture.

The problem is that they can easily wear out, break down, splinter, and so on, meaning that as money supply, they leave the monetary market more quickly, making the monetary market more unstable and more prone to imbalances and price changes.

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