close
    why can't the government print more money instead of going deeper in debt?

    0  Views: 366 Answers: 1 Posted: 12 years ago

    1 Answer

    Printing money won't help reducing debts because according to the quantity theory of money, when money supply increases faster than output (selling merchandize to other countries, for example) inflation will occur, Which means that the money's value will be reduced.
    The equation is MV=PY
    M= Money supply
    V= Velocity of circulation of money between people
    P= Price level
    Y= National Income

    Shootah

    I don't know, but the secret service gets real mad when we decide to do it ourselves! No wonder they can't afford to pay their prostitutes when they go out of town!


    Top contributors in Uncategorized category

     
    ROMOS
    Answers: 18061 / Questions: 154
    Karma: 1101K
     
    Colleen
    Answers: 47270 / Questions: 115
    Karma: 953K
     
    country bumpkin
    Answers: 11322 / Questions: 160
    Karma: 838K
     
    Benthere
    Answers: 2392 / Questions: 30
    Karma: 760K
    > Top contributors chart
    452070
    questions
    719630
    answers
    753058
    users