Functions Of Currency And Currency

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There are multiple functions to U.S currency and currency in general. One of the functions is that it is a medium of exchange. U.S currency can be used for the buying and selling of goods and services. This means that a person with money can exchange their money in order to get something of equal value. What determines the value of goods and services are called market forces. Another function of money is to store value. Money is not the only thing that is used to store value but it is the most common. People have been using currency much earlier than when the dollar came around. People would use different types of metals or other durable, valuable items as a form of currency. The purpose of having currency is to have something of value…show more content…
Ever since the 1960’s, United States currency has been backed by the “full faith and credit” of the United States government. This means that currently United States currency represents an IOU from the U.S government. Although this might not sound like much, the United States government is one of the most stable institutions in the world and an IOU from them is reliable and valuable. There is controversy over the penny in the United States. Some people believe that the U.S government should keep the penny in circulation and continue to make them but other people think that the U.S should just get rid of pennies. There are valid points to both arguments which is why it is so controversial. The main reason why people believe the penny should be eliminated is because of the cost of pennies for the United States government. The price of making each penny costs the government 1.5 cents while the value of a penny is one cent (Sparshott). Although half a penny might not seem like much, the U.S made 92 billion pennies between the year 2000 and 2014 (Wing).By continuing to make pennies, the U.S government lost over 4.6 billion dollars between 2000 and 2014. Another argument why the penny should be eliminated is because its worth to little to be useful. Inflation has eaten away the value of a penny over the years and they are practically worthless because of
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