How does monetary value change over time? From something worth $$$ in the early years to $$$$$ in today’s time.
In: Economics
The value of money is (like everything) depending on the supply and demand.
As money slowly gets more (wich is done on purpose) it must become less valuable because the amount of goods stays the same (or grows slower than the amount of money).
Why do we cause this inflation on purpose by printing money you may ask?
Well because the alternative is much worse. A solid currency has historically caused a lot of trouble because if supply doesn’t catch up with demand for money then it’s value increases (deflation). And then suddenly it’s a good investment to park your money in a safe (so even more deflation because the amount of money in circulation decreases). If noone invests their money then the economy comes to a grinding halt.
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