I understand that most countries do not follow a gold standard when issuing currency. Without this how does a government ensure that money printed actually has some (intrinsic) value?
2006-06-24 23:22:08 · 10 answers · asked by high_flyer1818 1 in Social Science ➔ Economics
First off, you're not going to like the answer to this question. They can't end poverty by just printing more money because of 2 factors: one is the way that money is distributed, although that could be changed, and the other is the fact that the more money you print, the less it will be worth, as inflation occurs automatically.
But the actual answer to your question is: they can't. The value of the American dollar, for instance, is based on the credit of the United States (just how much do you trust the government?) and its relative value in relation to other countries is based on how much of their money we have versus how much of our money they have.
In conclusion: money is an abstract concept which makes commerce easier and more efficient than barter. Only the international Kilowatt dollar, which is based on energy production, has a theoretical intrinsic value, but in truth it is currently only backed by US dollars.
2006-06-25 03:27:16 · answer #1 · answered by juliantreidiii 2 · 3⤊ 3⤋
You cannot eradicate poverty just by printing more and more currency, or even issuing gold standards. The more currency printed, the less it is worth. Anyways, the rich people are going to get the bigger share of the currency. Due to this, the poor people will become poorer and they wont be able to survive the inflating prices which occur due to unlimited currency printing. To eradicate poverty, it is necessary for the government to stop inflation of prices and bring in redistribution of money in the country so that the income of each person can be more and poverty can be eradicated gradually.
2006-06-24 23:32:10 · answer #2 · answered by Anonymous · 0⤊ 0⤋
No country is on the gold standard...leave this out of the question.
Paper money is only paper...what is any paper money worth?
No one really knows...so why expect social changes merely by printing more paper. The big question is,what is a dollar bill worth? No one really knows because it is only backed by the reputation of the issuing country.
The answer to the problem of poverty does not lie in the issuance of paper money!!! It is more of a social problem than just a matter of economics
2006-06-25 06:39:41 · answer #3 · answered by dinky 2 · 0⤊ 0⤋
Its such a nice thought, but I'm sorry to say it just don't work like that. The value of money would go down, so instead of paying only £2.60 for a pint of beer, it could end up as something like £260.00.
In the 2nd world war, the English pound drooped so low that children were able to just play with money, it was worthless, and the same would be the case if they just printed more of it now.
Like I say, A nice thought, but that's it just a nice thought.
2006-06-25 22:19:48 · answer #4 · answered by damien_black4 3 · 0⤊ 0⤋
The money supply is regulated by the central bank.
Called M2 and M3.
" M2
A category within the money supply that includes M1 in addition to all time-related deposits, savings deposits, and non-institutional money-market funds.
Investopedia Says: M2 is a broader classification of money than M1. Economists use M2 when looking to quantify the amount of money in circulation and trying to explain different economic monetary conditions.
See Also: M1, M3, Monetary Policy, Money Supply, Narrow Money "
2006-06-25 06:13:53 · answer #5 · answered by r_e_a_l_miles 4 · 0⤊ 0⤋
Money is a representation of gold.
So instead of walking into a shop and paying with heavy gold, you give them a note that basically says "This note is worth $10 of gold"
So a country can only have as much money as there is gold.
2006-06-24 23:27:17 · answer #6 · answered by Anonymous · 1⤊ 0⤋
definitely no longer each and each u . s . a . has it very own nicely-known off residing, subculture and traditions. How might having the got here forex remedy any issues whilst there is such vase adjustments in difference areas of international locations as an occasion i'm specific that the State of Maine do no longer proportion the comparable wealth and riches that say that California enjoys and that they have got the comparable forex.
2016-10-31 11:01:42 · answer #7 · answered by Anonymous · 0⤊ 0⤋
No, printing will not solve the problem... It will make the countries currency worthless...
The only way is to create education, jobs and investment (economy) will help the poor countries...
2006-06-24 23:44:45 · answer #8 · answered by Handsome 6 · 0⤊ 0⤋
straight up cos of a phenomena called inflation, look it up, the more money you print, the less its worth, simply put, theres alot more to it than that
2006-06-24 23:26:22 · answer #9 · answered by ? 4 · 0⤊ 0⤋
The more you have the less it becomes worth. A loaf of Bread could end up costing you £30.00.
2006-06-24 23:27:14 · answer #10 · answered by Anonymous · 0⤊ 0⤋