So imagine I lost a note of $10 and it somehow burns or anything that makes it disappear forever, what impact does this have on the economy or anything?
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Nothing, other than that you’re down $10.
The central bank monitors the supply of currency and, based on the needs of other banks and commercial groups, will print or destroy currency to keep the supply stable.
There is always some attrition in notes and coins that are lost or destroyed, and the central bank will also intentionally destroy notes that are looking a little ratty. Banks regularly send their not-so-good notes back to be replaced with new ones.
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