. Can the problem of scarcity be solved by printing more money and giving more money? If yes then why?

Answer 1

It is an interesting idea.

Scarcity is a shortgage of natural resources, nothing related to the money supply.

However, printing more money will cause inflation, which on a nominal level makes the price of scare resources rise, which theoretically would cause demand to drop.

But "real" prices and income haven't changed at all, so all you've accomplished is inflation with nothing to show for it.

Answer 2

No- the scarcity of the currency isn't the problem. The lack of goods and services is what defines scarcity.

Let's do a mind experiment. On an isolated island we have shells for currency and eat wild pigs.

Not enough pigs leaves us hungry no matter how many shells we collect.

Increasing the currency supply will only increase the market rate of the pig, not the number of pigs.

This is a highly simplified view of the model, and is based on multiple supply cycles.

In the short term, more people maybe motivated to raise pigs because there is more money to buy them, and the market rate has increased making it more profitable... so more pigs for a while, but the inflationary pressures of additional currency in an otherwise static marketplace might or might not sustain the growth, and there would likely be new scarcities created as people stop weaving baskets to raise pigs.

And next up, lots of other armchair economists flame my response- and are probably right. :)

Answer 3

No. forget approximately funds, this is a distraction. shortage is brought about via the constrained style of real actual components, and the constrained style of people available to control and grant those components, and via constrained time. ought to you supply all and sundry in u . s . a . of america a clean automobile this 365 days? No -- there are no longer almost sufficient people who're experienced to be autoworkers, and there are no longer almost sufficient factories or sufficient kit to make 3 hundred million new vehicles, rather of the 17 million that are regularly offered interior the U. S. industry. And if we released some huge attempt to shift as many people as achieveable to automobile production, we may be pulling them removed from proposing in spite of else they have been engaged on, turning out to be shortages someplace else. those are the real obstacles. funds purely serves as a means of allocating people and components to the place society desires them maximum, to optimize the output of products and amenities interior the right quantities based on the real obstacles we are dealing with.

Answer 4

No. Doing that will actually create inflation. Oddly enough, this was done to Germany during WWII to topple their economy. Allied forces flooded Germany with counterfeit money. This led to hyperinflation and caused the German currency to be worthless by the end of the war.