“You can't eat it, you can't build things with it, and burning it is actually illegal.” So what makes a dollar bill worth so much more than any other piece of paper?

TED-Ed's video, What Gives a Dollar Bill Its Value?, breaks down how money gets its value, what happened when the US moved away from the gold standard, and how the Federal Reserve works behind the scenes to keep the economy on track.

Questions:

• A hundred dollar bill is just paper, yet we treat it as valuable. What other things in everyday life only have value because we collectively agree they do?
• The video asks why the Fed doesn't just print infinite money to make everyone rich. In your own words, explain why that wouldn't work.
• If inflation means your money is worth less over time, why do most economists argue that a small amount of inflation is actually healthy for the economy?
• How does the Fed's control over the money supply connect to your own life?

Note: This video is from 2014 but it still provides a concise overview of what determines the values of our currency and how it relates to the broader economy. 

Supplement this video with additional resources from NGPF's Econ Collection!

About the Author

Sonia Dalal

Sonia has always been passionate about instruction and improving students' learning experiences. She's come a long way since her days as a first grader, when she would "teach" music and read to her very attentive stuffed animals after school. Since then, she has taught students as a K-12 tutor, worked in several EdTech startups in the Bay Area, and completed her Ed.M in Education from the Harvard Graduate School of Education. She is passionate about bringing the high quality personal finance content and instruction she wished she'd received in school to the next generation of students and educators. When she isn't crafting lesson guides or working with teachers, Sonia loves to spend her time singing, being outdoors, and adventuring with family and friends!

More posts by Sonia