4 ms·
Entry level textbooks. It's one of those things they intentionally teach wrong to first year students in an attempt to "simplify"
by tiberious726 2y ago
Entry level textbooks. It's one of those things they intentionally teach wrong to first year students in an attempt to "simplify"
- lottin 2y agoNo, it's not an attempt to simplify. Advanced textbooks define it in the same way.
- losvedir 2y agoDo you have a source? I've only ever seen it defined the traditional way. Besides, you can increase the money supply and not get inflation (defined the usual way). Inflation happens when the money supply increases more than the economy needs.
- seanmcdirmid 2y agoInflation happens when money supply increases more than the value of the goods that you can purchase with that money supply. It isn't about needs, but things that can be bought, especially those with limited supplies like housing.
- paulryanrogers 2y agoSo if money supply stayed the same but a crisis reduced the supply of goods, while demand increased, then those raising prices are ... not inflation?
- seanmcdirmid 2y agoSay Price = Money supply / value of goods If price goes up then inflation, if price goes down then deflation. If value of good goes down and money supply stays the same, inflation.