How Dollars Work
The US dollar is a fiat currency, backed by the US government's creditworthiness.
Creation
1. Federal Reserve (Fed) creates new dollars electronically.
2. Commercial banks lend and borrow dollars.
Circulation
1. Government spending and taxation.
2. Consumer purchases and business transactions.
3. International trade.
Value Determination
1. Supply and demand.
2. Interest rates (Fed).
3. Global economic conditions.
Types
1. Physical (coins, bills).
2. Digital (electronic transfers).
Management
1. Federal Reserve (monetary policy).
2. US Treasury (fiscal policy).
Key Statistics
1. Total supply: $2 trillion.
2. Daily transactions: $5 trillion.
3. Global reserves: 60%.
