5 Reasons You Are Not Making Any Money Online
Why can't we just print more money, since it really isn't representative of anything of value? Ask an Economist Question: So, my question might be more philosophical than economical, but it's wracking my brain and I can't seem to find an answer.
It is about currency and how our money is no longer backed by "gold. At the end of the day, if I choose, I could cash in my chips and get something of value for them.
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So, here is my question A lot of people out there are asking "why can't we just print more money and solve the poverty problem? So, the influx of cash printed money would seem to solve the unemployment problem.
It Doesn't Take Money To Make Money - Brandon Leibel - TEDxSDSU
So, here is where I'm confused But here's the catch. Hence the problem.
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But how does that relate to American economics since there is no why can t you make money out" procedure. If the government gave everyone a bunch more money, there is no "checks and balances" since no one, at the end of the day, goes to the cashier station and exchanges their "chips" money in this case for something of value.
2. Economic illiteracy
Exchanging your chips at the end of the day for MONEY back which has value in our eyes makes sense, hence why you can't give out more chips than the money you have in the vault. But it seems the American dollar is not a paper representation of the "money in the vault" no one goes to cash in their money in America. So I don't understand how currency works and why we can't just print more money since it really isn't representative of anything of value.
Please explain, as I cant find a good answer anywhere online. I hope this question wasn't convoluted.
Thank you so much for your time Answer: Let me try to remove some of the confusion. Now suppose the government simply prints more dollar bills and gives you and imagine everyone else an additional hundred dollars.
If you want to eat more than lbs of corn a month, now you can do so but presumably, since others like why can t you make money also want to do the same, the demand for corn in the economy would go up and very likely its price as well.
This, roughly speaking, is inflation, and it is eroding the real value of your dollars -- you are getting less corn for every dollar than you used to.
You ask, won't firms rush to meet this extra demand caused by everyone having an extra hundred dollars?
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Yes, they would but they'd have to hire people to work in the farms and the higher demand for workers would likely raise their wage. Also, workers will see the inflation around them and want higher dollar wages so they can continue to buy as much corn as before. In short, wages in real terms would rise and this would erode profits and as such, farms will not hire as many workers as you'd think.
So yes, there can be a short-lived stimulative effect of printing money. Bottom line is, no government can print money to get out of a recession or downturn. The deeper reason for this is that money is really a facilitator of exchange between people, a middleman in a trade. If goods could trade with goods directly, without a middleman, we would not need money.
Too much, too fast
If you print more money you simply affect the terms of trade between money and goods, nothing else. It is as if someone overnight added a zero to every dollar bill; that per se, changes nothing. Just as giving every student 10 extra points on a test changes nothing fundamentally.