2nd October 2019

thoughtco
17

Why is paper money so valuable?

The value of any good is determined by its supply and demand and the supply and demand for other goods in the economy. Inflation occurs when the price of goods increases; in other words when money becomes less valuable relative to those other goods. This can occur when: The supply of money goes up.

Why is money made of paper?

American Paper Money Isn't Made Of Paper. Currency paper also has small red and blue fibers embedded within it, making it difficult to reproduce. The cotton and linen fibers make the money less prone to tearing than paper—it takes about 4,000 double folds to rip a bill.
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