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If the cause of inflation is the same amount of dollars bidding up a lesser quantity of goods, the only way to resolve the situation is to increase the number o
by sb057 4y ago
If the cause of inflation is the same amount of dollars bidding up a lesser quantity of goods, the only way to resolve the situation is to increase the number of goods or decrease demand for them.
- MisterMower 4y agoNo, the correct way to do it is to reduce the size of the money supply, or at least slow its growth. Inflation is always and everywhere a monetary phenomenon.
- sb057 4y agoAll other factors being equal, that would be tantamount to reducing demand. Nominal prices would fall, yes (deflation), but a failure to increase supply would result in shortages. Shrinking the money supply would have quite a similar effect to price ceilings in this scenario.