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Words

inflation  noun - a general increase in prices and fall in the purchasing value of money

deflation  noun - reduction of the general level of prices in an economy

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If you decide to buy something with a paper sheet you would probably fail unless this paper is a banknote. But what exactly makes banknotes more valuable than any other piece of paper. They can only be exchanged for other things. You cannot eat or make things with them. 

Money is printed by the government or local authorities. This makes them legal unlike the ones printed by other people. But this does not give them a value. 

Until the end of the XX century, many currencies were bound to precious materials like gold. The value of money depended on the gold and silver reserves of the country. Today their value depends on their amount. If there is too little money available they will buy you more and more expensive things. If there is too much they will be worth less and buy fewer things.

The presence of too much money can cause inflation which makes money uncertain and makes you spend them fast. The contrary is deflation. It makes money more valuable and makes you keep them for longer. It also has its negative effects like increased unemployment.

What determines the value of money?