Re:High Inflation May Already Be Behind Us
by scottiebarnes on Tuesday June 28, 2022 @10:16AM
(#31907971)
What's your understanding as to the source of inflation in an economy?
An increase of nominal money in an economy creates competition over the same limited quantity of goods which causes a rise in prices. AKA when money is cheap (low interest), people borrow more, which becomes spending, which leads to increased demand (and usually inflexible supply), etc.
An increase of nominal money in an economy creates competition over the same limited quantity of goods which causes a rise in prices. AKA when money is cheap (low interest), people borrow more, which becomes spending, which leads to increased demand (and usually inflexible supply), etc.