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To: NOW who wrote (95365)4/17/2001 4:28:57 PM
From: GraceZ  Read Replies (2) | Respond to of 436258
 
Wrong, not necessarily, not if the money is put into productive assets. Suppose the economy grows and the monetary supply grows at the same rate? Or prices of commodities fall while the monetary supply grows?

That dollar of yours may be buying less house but according to some news sources it's buying more Sun servers and certainly more of anything from Canada.



To: NOW who wrote (95365)4/17/2001 5:29:00 PM
From: Ilaine  Read Replies (1) | Respond to of 436258
 
>>increasing the monetary supply IS inflation<<

I don't think anyone adheres to this definition but Austrian economists, their followers, and gold bugs. For the rest of the world, inflation is an increase in the price of goods and services.

The price of money goes up like the price of anything else - there is greater demand than supply, and competitition between consumers bids the price up. If supply exceeded demand, the price would go down.


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