3 ms·
The money supply doesn't directly effect inflation. The money supply causes an increase in demand which triggers inflation. If you printed 10 trillion dollars
by JamesBarney 5y ago
The money supply doesn't directly effect inflation. The money supply causes an increase in demand which triggers inflation.
If you printed 10 trillion dollars and shot it into orbit around the Sun prices wouldn't change. People have to spend it creating increased demand. This is one of the reasons quantitative easing had little effect. They printed a bunch of money but it just sat in banks and was never spent.