Can someone explain how fiat money works? I’m very bad at economics and reading about it is making my brain hurt. Is money even real?
In: Economics
The US dollar is a “fiat” currency. Nobody thinks that the piece of paper with Andrew Jackson’s picture on it is worth 20 times more than the piece of paper with George Washington’s picture on it. Opinions might vary on the value of the piece of paper with George Washington’s picture on it, but the Bureau of Engraving and Printing can make them for much less than one dollar each.
The only thing that makes the piece of paper with George on it worth a dollar is the US government’s requirement that people accept that piece of paper having that value.
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