What factors change the value of money?

Question

I was curious how come for every pound (Euro) we get $1.50? I mean, how do we come up with that number and why does it change? What factors affect money's value and current trading value? I don't understand how that quite works.

Answer 1

It's very complicated.  But basically if the U.S. economy tanks, we have less stuff to offer the world.  People in the US are willing provide goods and services for less money.  You should also research the 'gold standard', which would tie currency to the price of gold.

http://economics.about.com/cs/money/a/go...

Answer 2

Two must read articles:

http://www.lewrockwell.com/paul/paul221....

http://www.lewrockwell.com/paul/paul303....

Answer 3

Take an economics class, Yahoo answers retards can only crack the ice for you.

P.s. I'm a midget, I know.

Answer 4

the coutries' economies.

Answer 5

inflation.whoops i just saw veronaicas answer

Answer 6

I do not agree that inflation change the value of currency in the FOREX  market . there are factors which can affect the value of the currency against some other currencies, the first one is the level of Nominal and Real GDP , the other factor which is very indicative is Political and Economical Stability , also the level of Reserve that every government holds in their accounts with the WOrld Bank as a part of Bretton Woods system is very important to reserve the power of particular currency against other currencies , the other factor will be strong international trade presence , if particular country is strong in providing and corresponding to demands of good and services in the international market that would help the currency to power up as well.

Answer 7

inflation

Answer 8

Inflation is a huge reason why values are decreasing.i think if some of the products that we buy would be lower in price then people would actuallly start buy more resources and too much money wouldn't be thrown into the economic cycle.Another reason would be because money is becoming more and more scarce.With a growing population there isn't enough money going around.