If a coin is minted the material might cost less or more then the monetary value on it how are the governments assigning values to it?

Question

If a coin is minted the material might cost less or more then the monetary value on it how are the governments assigning values to it?

In: Economics

Answer 1

All of the money in a market ends up roughly equaling all of the stuff being sold in that market. If the human race generates nothing but bread, and ten tons of bread a year, then collectively every single person should collectively be able to afford exactly ten tons of bread every year.

As such, the value of the currency is decided based upon two things; how much of the currency exists, and how much the market produces. This gets more complicated with millions of markets running side by side, but that’s the fist.