Why can’t the government print more money? Answering the basics.
Picture: https://www.alamy.com/stock-photo/nepal-currency.html?page=5&sortBy=relevant Let’s print more money, distribute it to all citizens, and solve poverty. Sounds easy? Not really. The central bank controls the money supply and determines the amount circulated in an economy. It’s not that easy to print money not because of the machine’s capacity, but because of the economy. Printing a lot of money results in inflation and devaluation of currency. This takes us to the basic understanding of demand and supply. Printing more money results in an excess supply of money. People will have more money implying that they will have more purchasing power. People will now demand more goods and services but the supply remains constant. As a result, the firms are determined to increase the price of goods and services. You can no longer buy the same goods/services with the same amount of money. This results in inflation. Inflation results in a disincentive to save, increased menu costs, and ec
