Does the value of money always decrease at the different levels of time?

Question

Can the value of any currency be increased like the value of land and building or other tangible assets?

Answer 1

The value of money increased (deflation) in the 1930's in the US and in the 90's in Japan. Most economist believe that is is bad for the economy because the real interest rates must be higher than the rate of deflation, so the monetary authority can not stimulate economic growth by cutting rates if there is an economic slow down. Another way of looking at it is that if people can increase their real wealth by holding money, they will cut down on investments and the purchase of tangible assets.

Answer 2

as long as there is inflation, the real value of money will decrease.

inflation refers to increase in the general price levels. this means a fixed amount of money will continuously buy lesser amount of goods as long inflation is there, as the prices keep going up.

however, this is necessarily not the case all the time as the value can increase at rare occasions. in this case prices are falling, goods & services get cheaper. so a fixed amount of moeny can buy more good & services.this means the value of money is increasing

but actually, inflation is more prevalent all over the world. the only that i know of which had a deflation was Japan.

Answer 3

Of course! Money valuation is calculated in any country to make exports and imports earn us a profit. If you value your dollar to high, you make your exports too dear on the world markets! Thus they wont sell so well! On the other hand if you make your dollar too weak, you have to pay more for overseas goods on imports, and that causes inflation against your dollar and wage rises as the dollar buys less! Have a good day.

Answer 4

It's called inflation.We never see deflation now.