Question

Why can't a country become rich by printing more and more currency notes?

Answer 1

HEY...

NO IT CANT BECOZ CURRENCY CAN ONLY CAN PRINT THAT HOW MUCH GOLD INDIA HAVE...IT NEED TO GET GOLD FOR IT...THERE IS NO TREASURE ...THERE IS SOME RULES BEHIND IT WHICH MADE BY BANKS..SO THAT IS WHY WE CANT..

--RAAZ

Answer 2

Question:
Why can't a country become rich by printing more and more currency notes?

Answer:
In fact, in recessionary times – countries do resort to printing money, or what is known as Quantitative Easing (QE) a term that became popular just after the recession in 2008. But, that measure is only for extreme situations, and is also considered dangerous because printing money causes inflation in an economy, and if you print too much money you can get hyper – inflation also.

There is no fixed yard stick which determines the amount of printed money by central bank. It should be sufficient to make transfer of goods and services smooth and at the same time restore the value of currency..

Value of currency depends on many factors e.g. net exports, Current and fiscal deficit, Interest rate in the economy among many moving parameters.

Generally speaking central bank prints almost 2-3% money of total GDP. But this amount of money varies a lot from economy to economy. Mature or developed market prints 2-3% of their GDP. Emerging economy like India has much more than 2-3% money in circulation..