I don't really understand the big picture of economics. What causes inflation, I've been told, is too much money chasing too few goods&services. That makes sense. However, if a country's economy is growing in real terms (it is producing more goods&services because of higher productivity, let's say), and money isn't being created, deflation would happen. Does an economy create money as it creates goods&services automatically, or must money be siphoned out by the Federal Reserve, who must carefully balance the increase in money with the increase in goods&services produced?
Do stock traders and speculators create money?
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment