Question: is money worthless

Sam Geen answered on 21 Jun 2013:

Money doesn’t have any intrinsic value. This means that the value of the pieces of paper, the metal in the coins or the numbers on the bank’s computer are basically worthless. Instead, money is a promise – it’s a shared agreement between people to give people services or things in exchange for money. Prices do go up and down, and sometimes if people print too much money then prices go up because there’s more money around (this is called inflation). Money used to be directly linked to how much gold there was – if people dug up more gold, the government printed more money. The problem with this is that if people make more stuff (which is called economic growth, because the total value of the stuff in the economy, like cars or food or technology, goes up), then the value of money goes up, and prices go down, which is called deflation. This can cause problems – for example, people stop buying things because if they wait, their money is worth more. But the economy is complicated and people still don’t understand how everything about economics works.