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Firlakuza [10]
3 years ago
10

How do you think the changes in spending will affect the economy?

History
1 answer:
iren2701 [21]3 years ago
5 0
I think that if you are spending so much on little necessities, then your wasting money because the only things you need to buy are the things you actually need. Not electronics, not toys, just the simple things you need. Not phones, not PS4s, nothing like that. You pretty much are wasting your life on doing those type things. Your losing more energy everyday doing stuff like that. It is really not helping much when you do things like that because like I said, your wasting your energy, your money, and trees and minerals and things to keep the ACTUAL things we need in life today, like food and shade for when it's hot out from the trees. But you also need to keep in mind, the more money we make and things, more trees go away. Animals might even be dying from this. That is how I think the changes in spending will effect the economy.
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Fiat currency is, thus, a government issued-currency that is not supported by physical commodity, such physical commodity can be gold or silver.

The value of fiat money then is gotten from the relationship between supply and demand and the stability of government issuing it instead of the worth of a commodity that backs it.

For example, the United states dollar, euro and many world currencies are all fiat currency.  

Government, historically, mint coins from valuable physical commodity and print paper money that could be redeemed for a particular amount of physical commodity.

In the case of inflation or hyperinflation, fiat money tends to loose value and this is because it is not connected to physical reserves such as gold or silver. if people lose faith in the country's currency, it tends to lose its value.

This is entirely different from currency that is backed by gold mainly because the demands for products made of gold such as jewelries, computers, electronic devices and aerospace vehicles are very high.

Fiat currency is issued by most government as legal tender for the purpose of debt repayment

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