A Fascinating TED-Ed Animation About the Economics of Paper Currency
by Brian Heater at 10:03 am on June 25, 2014
In “What gives a dollar bill its value?”, a TED-Ed short animated by artist Qa’ed Mai, educator Doug Levinson explains how paper money is given value in an age in which our currency is no longer tied to the traditional gold standard.
The Fed uses vast amounts of economic data to determine how much currency should be in circulation, including previous rates of inflation, international trends and the unemployment rate. Like in the story of Goldilocks, they need to get the numbers just right to keep people employed and stimulate growth without letting inflation reach disruptive levels.