Question

Benjamin Franklin is credited with once saying, 'A penny saved is a penny earned.' The truth, however, is that a penny created costs nearly two pennies to make. The challenge of keeping pennies in circulation is that pennies are worthless and costly to produce. There is nothing that can be purchased for the cost of one penny. Even when penny sales are advertised, customers are still subjected to paying taxes, making nothing ever just one penny. The circulation of the penny, furthermore, accumulates as mere junk that people seem to acquire and use by force and not by choice. Another thing to note is that pennies are often left behind at the register for other customers or simply thrown away. The penny's value and significance in the economy has diminished greatly. In the 40s and 50s, pennies had an actual stake in the marketplace; however, today, they aren't used as a valuable form of exchange. The idea of a monetary system is that it is functional, and the currency used has value. Unfortunately, the penny simply has no place in today's economy. According to the US Mint, it costs approximately $1.82 to make one penny. The cost alone is startling. In the history of the United States, coins have often become outdated because of the cost to create them, so the penny should be no different. As times change, so should the systems that are in place. If the manufacturing cost of the penny is as much as it is today, what happens when inflation is factored in? In 1982, the government considered these costs and switched to using zinc to save money, but the penny is still too expensive to keep. On the other hand, some believe that the value of the penny alone may not be significant, but when accumulated, it's as good as a dollar bill. Often, people are willing to give charitably when asked to donate their loose change, which is often worthless pennies. While pennies that are donated are converted into dollars, the ___________.

Answer 1

The significance of money in an economy and its role as a medium of exchange, measure of value, and store of value.

Step-by-step explanation:

Money for the sake of money is not an end in itself. According to Ambrose Bierce, money is a "blessing that is of no advantage to us excepting when we part with it." Money is what people regularly use when purchasing or selling goods and services, and thus both buyers and sellers must widely accept money. Money serves as a medium of exchange, a measure of value, and a store of value. The existence of money provides enormous benefits to an economy, making transactions easier and allowing people to find employment and purchase the goods they need.