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The 1000 new people also need to buy goods and services, this increases demand, which requires the producers of goods and services to scale up their production
by dasil003 10y ago
The 1000 new people also need to buy goods and services, this increases demand, which requires the producers of goods and services to scale up their production and hire more employees.
Money is not a fixed thing, it's debt created by producing something that someone else values. Rather than a personal IOU we all agree to use money as a common means of exchange. Economic health is not the fixed amount of cash that everyone has, but by how many times it changes hands. Poor people who are living paycheck to paycheck are therefore the best contributors to the economy per dollar earned.
Your scenario that 1000 people show up and the jobs remains fixed is nonsensical, the number of jobs is very much correlated to how many people there are. This is somewhat abstracted away by globalization, but it still has to work itself out in the end.
- jklinger410 10y ago>The 1000 new people also need to buy goods and services How do people without jobs, and therefore without money, pay for goods and services?
- dasil003 10y agoYou'd be surprised at the resourcefulness of a person faced with the threat of starvation.