In simple terms, how is the value of a currency determined?
Payments
Asked by Question Bot09/Feb/20161 answer
1 Answer
F
Faisal Khan
Answered 09/Feb/2016
The value of any currency, be it private or fiat, is determined by acceptance and then how strong the acceptance is, i.e. by the supply and demand.
If the currency has low acceptance, there will not be many takers (demand will be low), and if the currency has a high-acceptance, the demand will be high). Controlling supply will enable ti value assigned to this currency also go higher or lower (depending on how much you print).
There are literally 1000s of factors as to what gives a currency its value, but the gist of it remains the same. Supply/Demand.
If the currency has low acceptance, there will not be many takers (demand will be low), and if the currency has a high-acceptance, the demand will be high). Controlling supply will enable ti value assigned to this currency also go higher or lower (depending on how much you print).
There are literally 1000s of factors as to what gives a currency its value, but the gist of it remains the same. Supply/Demand.