- This topic has 4 replies, 4 voices, and was last updated Apr-178:46 pm by
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Up3
To put it simply: imagine if a govt prints tons of local currency (effectively lowering interest rate). The money will end up in the local economy system, and encourages spending. A lot of money chasing a finite number of goods will lead to inflation (high demand, low supply of goods).
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Up2
printing more money = increases money supply (curve, if you want to think in terms of graphs)
more money in people’s pockets = more buying
but its not worthwhile for sellers right? so they boost prices up since there’s more money available for them to receive (this is not a technical explanation, just a scenario to help lol)
as a result, prices shoot up = inflation!!!otherwise, I agree with @sophie
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Up1
printing more money = increases money supply (curve, if you want to think in terms of graphs)
more money in people’s pockets = more buying
but its not worthwhile for sellers right? so they boost prices up since there’s more money available for them to receive (this is not a technical explanation, just a scenario to help lol)
as a result, prices shoot up = inflation!!!otherwise, I agree with @sophie
That’s how I remember it too @lulu123 🙂
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