What are fungible goods?

Fungible goods are those that are interchangeable with other goods of the same type and quality. This means that individual units of fungible goods are identical and can be substituted for one another without any loss in value or function. Common examples include commodities like grains, oil, or currency, where one unit can easily replace another because they are equivalent in nature.

The characteristic of being identical in nature is crucial for fungible goods, as it allows for seamless exchange and simplification in transactions. This quality is what distinguishes fungible goods from unique goods, which have distinct characteristics that prevent substitution. Therefore, the definition of fungible goods aligns perfectly with the idea of goods being identical, making the given answer accurate.