How do you think printing more money affects the value of money?

Suppose an economy produces £10 million worth of goods; e.g. 1 million books at £10 each.If the government doubled the money supply, we would still have 1 million books, but people have more money. Demand for books would rise, and firms would push up prices.The most likely scenario is that if the money supply were doubled, we would have 1 million books sold at £20. The economy is now worth £20 million rather than £10 million. But, the number of goods is exactly the same.We can say that the increase in GDP is a money illusion. – True you have more money, but if everything is more expensive, you are not any better off.In this simple model, printing more money has made goods more expensive, but hasn’t changed the quantity of goods.

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