Prices rise when the government prints too much money real example
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When the government prints too much money, the money in the hands of the people, i.e. their purchasing power increases.
This means that people rush to markets to buy more things because they have money. In such a case, demand may exceed supply, causing a rise in prices.
A real life example -
Ramu and his family have ₹200 in their hands. This allows them to but 10 balloons. But if Ramu and his family have ₹2000 in their hands, they can buy 100 balloons. It is the same case with the 1.2 billion people in India. everyone has more money to spend. So they buy more, causing the demand to become more than the supply.
We know, when demand > supply, prices rise.
This means that people rush to markets to buy more things because they have money. In such a case, demand may exceed supply, causing a rise in prices.
A real life example -
Ramu and his family have ₹200 in their hands. This allows them to but 10 balloons. But if Ramu and his family have ₹2000 in their hands, they can buy 100 balloons. It is the same case with the 1.2 billion people in India. everyone has more money to spend. So they buy more, causing the demand to become more than the supply.
We know, when demand > supply, prices rise.
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