Imagine you have a bag of gold coins and your friend has a bag of paper notes. If people trust the paper notes to be as good as gold, they're valuable. When more people want to use those notes, their value goes up like magic, just like how a popular toy becomes more expensive when everyone wants it.
Examples
- You trade a candy for another one because they look better.
- Your little brother gives you five stickers in exchange for your toy car.
Ask a question
See also
- Why Do We Have Different Kinds of Taxes?
- Why Do Prices Change So Much?
- Why Do We Use Money Instead of Bartering?
- Why Do Prices Go Up So Much When There's a Shortage?
- Why Do We Have Different Kinds of Coins?
Discussion
Recent activity
Categories: Economics · currency,value,money,economics