To me it’d seem that the only reason paper money is worth something is because enough people believe it is. And if that’s the case and more can be printed. There’s no rarity really either. I’d love to hear some explanations. Thanks.
In: Economics
Why is money that’s backed by gold worth anything? Why is the gold itself worth anything? It’s all the same answer.
People agree that it is valuable. “Value” is a human invention. You are on the right track with rarity though. If we do print more of it, it does go down in value. That’s because more people have more of it, which makes us feel like it is less valuable. We value it’s rarity.
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