What Is the Point of a Banknote?

A banknote is like a magic piece of paper that people trust to buy things. Imagine if you had to carry all your coins every time you went to the store, it would be a lot! A banknote lets you carry money easily, and everyone agrees it has value because the government says so.

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Examples

A child uses a $10 bill to buy candy from the store instead of counting out ten dollars in coins.
You give your friend a banknote as a gift for their birthday.
The government prints new banknotes with a picture of a famous person on them.

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Categories: Economics · Money,Currency,History of Money