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Keep avoiding answering.. I am not wrong
Posted on: January 27, 2025 at 13:11:50 CT
Spanky KU
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and you are the idiot...
In theory, there is a strong link between the money supply and inflation. If the money supply rises faster than real output, then prices will usually rise. This means if a Central Bank prints more money, we will often (though not always!) get higher inflation.
https://www.investopedia.com/ask/answers/042015/how-does-money-supply-affect-inflation.asp
Inflation can happen if the money supply grows faster than the economic output under otherwise normal economic circumstances. Inflation, or the rate at which the average price of goods or services increases over time, can also be affected by factors beyond the money supply.
When Changes in Money Supply Do Not Cause Inflation:
There are several situations that occur where increases in the money supply do not cause inflation.
1) Economic growth may match money supply growth. If the level of economic growth is equal to the level of money supply growth, prices traditionally remain stable.
2) There are variations in the velocity of money circulating. In a recession, the Fed may choose to increase the money supply; however, the spending patterns of consumers will vary during this period—including periods of decreased spending due to higher unemployment and less disposable income.
3) The economy has spare room to grow. During a recession, an economy is not operating at full capacity. Though an increase in the money supply provides additional resources, there may be minimal to no demand for additional capital as the economy grapples with stunted economic growth.
Edited by Spanky at 13:44:07 on 01/27/25
In theory, there is a strong link between the money supply and inflation. If the money supply rises faster than real output, then prices will usually rise. This means if a Central Bank prints more money, we will often (though not always!) get higher inflation.
https://www.investopedia.com/ask/answers/042015/how-does-money-supply-affect-inflation.asp
Inflation can happen if the money supply grows faster than the economic output under otherwise normal economic circumstances. Inflation, or the rate at which the average price of goods or services increases over time, can also be affected by factors beyond the money supply.
When Changes in Money Supply Do Not Cause Inflation:
There are several situations that occur where increases in the money supply do not cause inflation.
1) Economic growth may match money supply growth. If the level of economic growth is equal to the level of money supply growth, prices traditionally remain stable.
2) There are variations in the velocity of money circulating. In a recession, the Fed may choose to increase the money supply; however, the spending patterns of consumers will vary during this period—including periods of decreased spending due to higher unemployment and less disposable income.
3) The economy has spare room to grow. During a recession, an economy is not operating at full capacity. Though an increase in the money supply provides additional resources, there may be minimal to no demand for additional capital as the economy grapples with stunted economic growth.
Edited by Spanky at 13:44:07 on 01/27/25
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Keep avoiding answering.. I am not wrong - Spanky KU - 1/27 13:11:50