Why does printing more money not solve the problem of scarcity?

Asked by: Martinibeer
  • Because you aren't solving the issue

    Scarcity of money annot be cured by issuing more money, it will just snap back to its original value, you need to issue more money as well as increase intrest rates to prevent inflation, and create jobs to increase production, more product allows for more money because the money supply always equals the ammount of products availsable in the economy.

  • It decreases the money's value.

    When you print more money, people have more money, so they can buy more expensive products. In order to account for increased demand and maintain a supply, businesses raise their prices. This makes it just as hard for people to buy expensive products than it did before more money was printed.

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