If a country is poor, why can't they print more money and exchange with other countries for goods?

Question

There are many third world countries that are poor, why can't the government print more money and then trade with other countries to get rich?

Answer 1

Simply because "money" is only good if the currency is backed by something other people want. For example, the United States dollar has value because other people, comprising other countries, demand dollars because it purchases American goods. A bit oversimplified. Nevertheless, if a less developed country merely printed more money, the amount of money supplied by the government would simply lead to inflation because the wealth of a nation is not determined by its own currency reserves but rather by what it produces and the value to others of the products- both within the country and from without. Moreover, if a "poor" country prints too much currency, assuming no international trade, it merely leads to too many "dollars" chasing too few goods-inflation-because in the short run, internal capital and internal productive capacity is fixed. That is to say, the poor country has little internal infrastructure to meet any increased demand and likely few investors willing to make the capital improvements. I hope this helps.

Answer 2

Because money creation must be linked to real production capacity or else the currency will be compromised and lose its value. Countries are poor because they are unproductive and cannot create many goods and services. If you dumped a bunch of empty currency into this situation without the country becoming more productive in a real sense, people would use all that cash to outrageously bid up the prices of the few goods available. The result is hyperinflation. No one is actually wealthier -- there is just more currency floating around and higher price tags on everything.

As for trade, other countries would not accept this poor 3rd world country's currency in trade, so that won't help.

Answer 3

originally, when money was printed, each dollar (or whatever the currency is) had gold or another precious metal backing it. however, nowadays, money is controlled by governments in an effort to manage economics. if a country prints too much money, their economy would be flooded, and their money would literally be worth nothing, and their markets would most likely crash. the trick to regulating money is to keep just enough money in circulation so that wealth is unevenly distributed, so the people who want more money have to work for it, thereby increasing the number of services and goods valuable to the society. too little, and the people stage a revolution, like the bolsheviks in russia, and too much, and the money won't be worth the paper its printed on. economics is boring, i know.

Answer 4

Money and future

they are not in charge of the money,
the illumiinati banking system has control over the money ,on the whole planet ,only they can print as they like .
and the money is only a promise to pay a debt ,it is only real as long as people believe it .
there are plans to replace cash money for only electronic money ,like credit cards

,this is the first step ,after that we get microchip implants ,which is a lot more than credit cards,it gives your location and can also affect the operation of your brain ,like make you sad,violent,happy or dead.

the cash money will then be with drawn or made obselete and only thechipped people can buy or sell.
this is the mark of the beast
check www.infowars
sorry got outside your question a little bit

Answer 5

Thank you for your interesting question.

Your question is simple but answer is not so easy. Because there are two main reasons that can not enable any govt. to print more local currency and exchange. These are-

1. According to international rules, when any govt. goes to print specific amount of currency, they have to reserve/stock GOLD in National Bank (which value is same as that amount of currency). So, its a great restriction.

2. According to rules of Economics- Extra money supply in the market would be cause for INFLATION (increase the price of goods and services).

Thanks.

Answer 6

Because money is more than the paper it is printed on, you see. Money has to have something that backs it up. Gold is the standard of most money and for the money there must be gold to back up the paper becasue the paper is actually worthless with out the gold to back it. do you understand? That is why we have Fort Knox where they keep all the gold which backs up our money. Forget the idea of just printing money with no backing it would be worthless!

Answer 7

That's called inflation. The more money in circulation, the lower the exchange rate. You can't get rich.

Answer 8

Because the money would have no value. Money is worth nothing it is its rarity and the faith that people place in the fact that it can be used to obtain goods or services for it that gives it value.

Answer 9

the government already does that but is greedy and uses it for themselves while their citizens are poor and they couldn't care less about them their governments use it on themselves, such as to build large castles and buy themselves anything they want with the money that belongs to their people

Answer 10

If they print more money, then the money would have less value.