Difficulty: Challenger (Level 2)
If we want to add up how much money there is in the world, a good place to start would be counting all the notes and coins out there – in people’s wallets, money boxes and cash machines.
How much money is out there?
Let’s start with the yuan. There is about ¥9,616 billion in Chinese money out there in coins and notes. There’s also £84 billion in British money, US$2,236 billion in US money and €1,578 billion in the money of the European Union. This does not include cash in many other currencies.
Money is not the same in every country. Hence, summing up all the coins and notes in the world means that you need to measure how much a US dollar, an Indian rupee, or a Chinese yuan is worth. Then, you will find about HK$61.6 trillion out in the world.
This amount could change quickly and probably needs to be updated when you read this article. This is partly because countries print more money all the time. But it’s also because of the exchange rate.
This means that the value of a British pound is different in another currency, like the US dollar. This value is not always the same. Today, £1 is worth around US$1.30 (HK$10.08), but 10 years ago, it was more: US$1.70.
But counting coins and notes only tells us some things about how much money there is in the world. For example, people have money in their bank accounts. If you add the figures available for the world as a whole again – cash in coins and notes, plus electronic money in banks – you get about HK$469.3 trillion.
Wealth – but not money
There are also many things, like businesses or objects, that are worth a lot of money. Some things that have value cannot easily be turned into money.
Imagine a beautiful forest with a clean river, rare birds and old trees. Underneath that forest, there is oil.
But if you decide to turn this land into money, you will need to destroy the forest.
People might have enjoyed spending time with their friends in the forest or paddling in the rivers. This has value, and it is lost when the forest is gone. The air and water will become unhealthy with the tree-cutting and oil-drilling, affecting the people and animals living there.
If we want the money we use to still be worth something in the future, we should refrain from destroying what we own to get cash today.
Renaud Foucart is a senior lecturer in economics at the Lancaster University Management School. This article was first published by The Conversation.
Suggested answers
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Before you read: Money is important because it helps you to buy what you need. It also helps you receive payment from people after you do something for them. (answers may vary)
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Stop and think: It’s hard to give an exact number because exchange rates are always changing and countries are always printing more money. It’s also hard to count the value of material things.
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Consider: I own a toy that is very fun to play with. All of my friends like to come to my home to play with this toy. I would not sell it because I prefer to keep playing with it whenever I want. (answers may vary)
