why is money so important when it is just paper that can be printed?
In: Economics
Money is a placeholder of agreed value – before money was common, people would trade goods or services directly (I’ll give you a dozen eggs for 3 pounds of bacon” or whatever). However, that’s slightly inconvenient, because everyone will value their bacon and eggs slightly differently. The benefit of printed money as a universal system is that one dollar in a particular year is worth one dollar in that same year, so you can go up to someone and not have to worry about the fact that one of your pigs is a bit on the small side so you may need another. You can just spend some amount of money, and get something in return. It makes things very convenient – when the system works.
You can’t *just* print money, because of basic supply and demand: the more money there is, compared to how much there is to spend it on, the less that money is worth. In Venezuela, the … President’s? solution to economic trouble was to just print more money, so the inflation rate *in April* was about 4000% – if something cost 1 Venezuelan Currency today, next year (everything staying the same), that same thing would cost *40* Venezuelan Currency
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