I’ve read about these concepts and constantly hear them but I still don’t understand how money/assets fluctuations happen
In: Economics
The value of stocks and “stuff” depends on how much people want it and how much supply is available. If many people wants the good, the seller can raise the price and people will still want it. If there is many sellers selling the same good, the seller will need to lower the price to stay competitive. This includes tangible goods and intangible goods like stock. This is the very basics of supply and demand.
Currency operates in the same manner. Currency has a value because there are multiple currencies, and the not so obvious point that if you want to trade in a particular country, e.g. US, you need US dollars. So if businesses from foreign countries want to trade with US they need US dollars and that forms a demand. Now the same supply and demand can apply.
Latest Answers