What gives a dollar bill its value?

The value of money is determined by how much (or how little) of it is in circulation. But who makes that decision, and how does their choice affect the economy at large? Doug Levinson takes a trip into the United States Federal Reserve, examining how the people who work there aim to balance the value of the dollar to prevent inflation or deflation.



After watching the video, answer the following questions:

1. In a democracy, does it make sense to have decisions about monetary policy made by people who are not elected? Why or why not?
2. Should the government encourage people to own their own homes, even if they have to go into debt to do that?
3. What is your opinion about the long-term health of the U.S. economy, and why do you have that opinion?
4. What is United States currency linked to?
5. Which branch of government decides how much money will be in circulation in our economy?
6. If the total amount of currency circulating increases faster than the total value of goods and services in the economy that is referred to as ...
7. One effect of deflation is ...
8. Where do profits from the Federal Reserve System go?

How about you?, How have you experienced inflation/deflation in your personal life?
Source: Ted Talks