Can they ever be reset? Or will one day a regular chocolate bar cost for example €50? House that costs €200k cost €1,000,000? Will the likes of the euro or US dollar one day be the same as currencies such as the YEN where “1” of them is essentially worthless?
In: Economics
What you are looking for is “redenomination”.
Basically the face values “reset” and are reissued. So if a dollar was only worth the equivalent of a modern penny… the government would reissue 1 dollar bills that were worth 100 old dollar bills (along with all other denominations) and we would just play ball.
Otherwise currencies do rise and fall in value, constantly. A massive increase in value would be deflation, which does happen. However economically it is often just as bad… if not worse… than inflation.
Why? Because if I can spend $100 dollars to hire you to produce $10 dollar of profit, but if I just keep the $100 dollars next month it’ll be worth $120 dollars (making me $20 profit) I’m not going to hire you. I’m going to fire your ass and just sit on my money.
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