Since money basically represents the confidence in the capacity of a countries economy to provide you with a service or good would the value of say the US dollar fall if everyone quit working overnight?
In: Economics
I’m some ways yes, in other ways no.
First- no country would be ok if everyone quit overnight. Every country would fail.
Second, it’s pretty rare to “invest” in a country’s money. People mostly don’t like to just hold dollars or euros or yen. It’s much easier and better to hold bonds- government debt (or corporate debt). You might think that you’re an investor in dollars since you hold them in a bank account. But your more likely to actually be negative on net in dollars- you might have $5000 in a back account, but owe $400,000 on a mortgage, or $10,000 on a car loan, or $50,000 on student loans.
But money’s value is related to the confidence in a country- or more likely related to confidence in that money. A country with a healthy economy is more likely to keep their money stably valued- but that’s not always the case. Some countries intentionally devalue their money to make exports more competitive, and some countries may arbitrarily have high or low amounts of money outstanding.
And a small wealthy country might decide to have little money issued and mostly transact in another countries currency- not because they’re poor, but out of convenience.
Latest Answers