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

Because they’re the government. They can do that.

There’s lots of fancy words around the edges of this idea, but it’s a simple idea. The government says “whatever it cost to make, this little metal disk is worth one cent. We will accept it when you pay your taxes, and everyone else you deal with must accept it as payment too, under xyz conditions.”

And bam, now that disk is worth a cent.