TED-Ed: What gives a dollar bill its value? - Doug Levinson

The video explains the value of a $100 bill, highlighting its status as legal tender issued by the government. It discusses the transition from commodity-backed currency to fiat money, managed by the Federal Reserve, which is independent of government branches. The video explores inflation and deflation, their effects on the economy, and the Fed's role in maintaining a balance to encourage economic growth. The Fed uses economic data to regulate currency circulation, aiming for a stable economy with controlled inflation.

What makes a $100 bill more valuable than other pieces of paper?

• It is made of special material.

• It can be used to build things.

• It is linked to gold reserves.

• It is designated as official currency by the government.

Who is responsible for setting monetary policy in the United States?

• The Federal Reserve

• The Judicial Branch

• The Legislative Branch

• The Executive Branch

Why can't the Federal Reserve print unlimited $100 bills?

• It would lead to inflation, reducing the value of money.

• It is illegal to print more than a certain amount.

• The government does not allow it.

• It would cause deflation, increasing the value of money.

What is the economic effect of deflation?

• It causes people to hold onto their money, reducing spending.

• It leads to increased business profits.

• It encourages people to spend more.

• It results in higher prices for goods and services.

What does the Federal Reserve use to determine the amount of currency in circulation?

• The number of $100 bills in circulation

• Public opinion polls

• Economic data such as inflation rates and unemployment

• The amount of gold in reserves