Yahoo Answers is shutting down on May 4th, 2021 (Eastern Time) and beginning April 20th, 2021 (Eastern Time) the Yahoo Answers website will be in read-only mode. There will be no changes to other Yahoo properties or services, or your Yahoo account. You can find more information about the Yahoo Answers shutdown and how to download your data on this help page.
Trending News
is printing money bad or the companies that uses that excuse to rise prices and going wild?
5 Answers
- Anonymous1 decade agoFavorite Answer
No it is not, if the new money is printed by the Treasury at the right time and the right place.If the US stop printing new money, the world will be in a shortage of hard currency for trade and investment. And you might be able to observe that the first stimulus package with a huge sum of new money, has little effect on inflation in the US, but somewhere else. The rate of inflation in the US is still lower than 1%, compared to over 3% right now elsewhere.Now the FED must go to the second round. Be prepared.
- simplicitusLv 71 decade ago
Things are never that simple.
(1) Just about everyone agrees that if you want the economy to grow, the money supply has to grow along with it. Everyone also agrees that too large a supply of money is bad. So it isn't a question of whether the government should create money, but how much and when.
Some argue that there should never be any inflation, so the money supply should exactly match the productivity.
http://americawideopen.wordpress.com/2007/12/15/co...
http://www.cato.org/pubs/journal/cj12n1/cj12n1-11....
Most economists agree that some inflation is good - that the money supply should grow a little faster than the supply of goods and services:
http://findarticles.com/p/articles/mi_m1093/is_n1_...
http://pages.stern.nyu.edu/~nroubini/NYT/krugecona...
Target inflation rates vary from 1.5% to 4%
http://en.wikipedia.org/wiki/Inflation_targeting
http://online.wsj.com/article/SB100014240527487043...
The monetarists, such as Milton Friedman, argued that the government should increase the money supply at a constant rate - with no variation.
http://en.wikipedia.org/wiki/Friedman's_k-percent_...
That school of economists is effectively defunct.
The Keynesians argue that the money supply should reflect the state of the economy - when the economy is in recession due to lack of demand, stimulate it with more money; when the economy is too hot, cool it down by reducing the amount of money.
http://en.wikipedia.org/wiki/Keynesian_economics
(2) As for companies and the prices they charge
(A) One element is what they think will get them the most profits. (Very few products are in a purely competitive market where the producer has no control over prices)
(B) Another factor is actual costs.
From what I can tell, in the U.S., some prices are going up, others are going down, and others are fairly stable. I certainly don't see the large scale increase in prices that would be significant inflation.
- DoILiveInOzLv 51 decade ago
Printing money is legal counterfeiting; legal plunder.
When the amount of money is increased the demand goes down relative to other things. When the value of money goes down the prices go up.
Source(s): http://www.youtube.com/watch?v=d0nERTFo-Sk "Fear the Boom and Bust" a Hayek vs. Keynes Rap Anthem http://mises.org/books/whathasgovernmentdone.pdf http://www.fee.org/pdf/books/The_Law.pdf The Law http://oll.libertyfund.org/index.php?option=com_co... The Law audio http://www.jonathangullible.com/translations/UK_Co... http://fee.org/library/books/economics-in-one-less... "Economics In One Lesson" - 1 decade ago
You got some understanding problems
"That uses that excuse to rise prices"???
They don't need an excuse, the market always charges around equilibrium price.
- How do you think about the answers? You can sign in to vote the answer.