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The value of money in an economy is determined by factors such as supply and demand, inflation rates, interest rates, and overall economic stability. These factors influence how much a currency is worth in relation to goods and services, as well as other currencies.

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4mo ago

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What are the roles of money supply in the economy?

Money supply determines the value of money i.e. if there are a lot of money in an economy, the value decreases and the other way around. Therefore, money supply essential decides the price of a good (if the money is worth less, the prices go up ...etc...) Hence, according to monetarists, money supply is the key ingredient of inflation (and deflation)


What are the roles of money in the economy?

Money supply determines the value of money i.e. if there are a lot of money in an economy, the value decreases and the other way around. Therefore, money supply essential decides the price of a good (if the money is worth less, the prices go up ...etc...) Hence, according to monetarists, money supply is the key ingredient of inflation (and deflation)


What primarily determines the supply of money in the US economy?

Federal reserve


What are the importance of national income in the economy?

The importance of national income in the economy is absolutely huge. This determines whether or not there is money that can be spent.


Why do the actions of central banks have an important effect on the global economy?

Control of the money supply determines how much money is available for international trade.


Who determines what goods to produce in the economy?

It is the demand and supply which determines the goods and services to produce in the economy.


What is the state of the economy if the tub overflows?

it means that the money value decrises


The relationship between the value of money and the price level in an economy is?

Inverse


What two qualities that money has?

Money allows people to purchase products and services. It also allows people to invest in order to increase wealth. The value of money is determined by a dozen factors such as interest rates, amount of physical money circulating in the economy, as well as what the currency is worth in the invest markets. The wealth/debt ratio of a country determines it's value Vs other currencies across the globe.


What does too much money in the economy lead to?

A high level of capital in the economy exerts and inflationary pressure. With this, prices can rise and the value of the money goes down.


How the currency value of each country decided?

How well their economy is doing determines what the value of their currency compared to other currencies. If it is doing well it is high but if it is doing badly it is low.


What is Money economy?

money economy is an economy money