If x amount of money were introduced (discretly, with no one noticing) to the market, how does the market “know” that that amount of money has been introduced (thus adjusting prices)?
In: Economics
More money in the hands of buyers = more commodities purchased at current price X with some overpriced commodities sold when the cheaper supply runs out, thus rising the average price of sold item.
On top of this direct consequence, the suppliers who sold more products or pricier products can increase the production in response to increased market need, repeating this price increase effect in whatever the supplies they manufactured their products of, driving the costs up for everybody and forcing all the manufacturers to rise prices beyond X, thus making the money in hand of buyers mentioned in first line worth less because the base price of object is now higher.
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