Pedro Arantes
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Inflation

In macroeconomics, money supply is the quantity of the money in circulation that an economy have in a point of time.
#economy
Zettelkasten,February 18, 2021 (updated at March 08, 2021)

Notes

  • Inflation is the rise of the general prices of a economy in a period of time.
  • If the inflation is positive, the general prices increases and each unity of the currency buy few products and services.
  • The opposite of inflation is deflation.
    • The general prices of products and services decreases.
  • Long period of sustained inflation is correlated with money supply growing rate higher than the economy growth rate.

Questions

  • What is better: high or low inflation?

  • What are the second order effects of a high inflation? And a deflation?

  • Why inflation increases when the money supply growing rate is higher than the economy growth rate?

References

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