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
TL:DR, money is worth the value it’s given because we will only give it up for equally valuable products.
Money doesn’t really have inherent value, it just acts as a promise or a debt. On a British banknote you can find the line “I hereby promise to pay the bearer on demand the sum of X pounds”. Money was invented so that people didn’t have to trade goods-for-goods, you could trade your goods for money, and your money for someone else’s goods.
New money is often only minted to replace old money, not to add to the pool. This is why printing more doesn’t make a country richer, it just makes the other money in the country less valuable. Money is only worth the value of the good we are giving it up for, so increasing the produce in a country is the way to boost its economy, not just adding more coins and notes.
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