I tried to think about this and its consiquenses. But need more expert thoughts.
2006-10-02 02:44:48 · 4 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
Most modern money is what is referred to as "fiat money" meaning that it's value is ultimately in the economy backing it. If you increase the volume of "cash" without increasing the actual value of the economy behind the "cash" each unit of cash would have a lower value, but the aggregate sum would have the same value (of the economy).
Basically printing more money just spreads the same nominal value over a larger number of units, thus watering down the value of each unit.
2006-10-02 02:55:52 · answer #1 · answered by Sanmigsean 6 · 1⤊ 0⤋
Paper money means nothing if it is not backed by something that is actually valuable. Look into information on American currency to get a better idea of how that works.
2006-10-02 02:52:27 · answer #2 · answered by Anonymous · 0⤊ 0⤋
Inflation.
2006-10-02 02:51:52 · answer #3 · answered by Anonymous · 0⤊ 0⤋
causes inflation,money becomes worthless
2006-10-02 02:52:41 · answer #4 · answered by dumplingmuffin 7 · 0⤊ 0⤋