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Paper money (fiat currency in particular) gets value because you can pay debts and taxes with it.
by svs 11y ago
Paper money (fiat currency in particular) gets value because you can pay debts and taxes with it.
- mamon 11y agoNo, paper money gets value because your government forces you to use it - not accepting payment in local currency is punished by fine or jail time in the most parts of the world.
- svs 11y agoCorrect. You can discharge any financial obligation with the legal tender and the recipient is obliged to accept it. We're saying the same thing.
- raincom 11y agoYou are correct. That's the foundation of Modern Monetary Theory.