Hey Folks,
I’m curious about what happens if a country prints more money. How does it impact the economy, inflation, and purchasing power? Any historical examples where this had big effects? How do governments and central banks manage this, and what happens if they print too much? What are the short-term and long-term consequences?
Thanks for any insights…
Imagine if someone printed 1 million dollars for you. Will you keep the money unused or will you spend it on goods and services you like?
Basically when money supply increases, more money chases more goods to be consumed. And when demand for goods increases, manufacturers will increase prices to bring equilibrium.
Additionally, the goods in question could be of limited quantity. Let’s say for an example, a limited edition phone out of which only 10 units exist. More money in the system will mean the bidding for the item will increase as demand also has competition. Thereby naturally increasing prices.