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

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    0  Views: 367 Answers: 1 Posted: 12 years ago
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      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

      11 years ago. Rating: 3
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        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!
        commented 11 years ago


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