United States dollar
From Simple English Wikipedia, the free encyclopedia
The United States dollar or the American dollar is the official currency, or money, of the United States of America. When writing, the symbol for the American dollar is the dollar sign ($). Dollars can also be known as USD (U.S. Dollar).
The American one dollar bill has a picture of George Washington. There are also paper bills that are worth 1, 2, 5, 10, 20, 50, and 100 dollars.
There are also dollar coins. Some of them are silver and some of them are gold-colored. Vending machines often give dollar coins as change, since it is easier for the machines to give out coins than paper money. But most of the time people use paper dollars.
There are 100 cents in one American dollar. The cent or "penny" is the smallest or least worth coin used in the U.S. There are half-dollar coins, which are worth 50 cents. Quarters are worth 25 cents, dimes are worth ten cents, nickels are worth five cents, and pennies are worth one cent. All coins and paper bills have the faces of famous Americans on the front side.
The paper "dollar bill" is actually called a "Federal Reserve Note". "Federal" refers to the U.S. government. The United States Constitution(the main laws in the country}, first said that the government must hold enough gold to redeem (trade for) the paper money it printed. This means that, if needed, paper money could be traded to the government for gold. The government of the United States stopped using this "gold standard" in 1971, which means it no longer needs to have enough gold to trade for paper money.
The Federal Reserve is the federal government's bank. It lets other banks borrow money. The banks then let people and companies take the money from them. The banks then pay money at a rate called the Federal Funds Rate. This number is set by the Federal Reserve Board and is changed however money is in the country. The paid rate is called the "overnight lending rate" because money is borrowed for a small time.
By giving to banks,(or creating liquidity)the Fed can bring more money into the world and focus interest on newly created money.
Many dollars never enter into the cycle which makes money. They are held in digital accounts and never live in paper form. After printing by the Bureau of Engraving and Printing, the real paper dollars are sold for no more than the cost of the ink and paper.
