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Results tagged with money-supply
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user 4185
Use for questions primarily related to the stock of money, either narrow money (MB or M0), and broad money (M1, M2, etc). This can also be used in questions related to the creation of money by governments and central banks, including questions related to models with a money market like IS-LM, where the supply is of importance.
2
votes
Why are there (still) coins?
One answer that hasn't been mentioned yet is menu costs.
Abolishing coins would require everything to be repriced to the nearest dollar, which would be fairly inconvenient for a large number of buyers …
- 3,487
2
votes
What would be the effect on the economy if the United States legalized counterfeiting?
The initial effect would be great inflation, likely hyperinflation, devaluing the US dollar.
Some counterfeiters have had extensive operations, running in the tens or hundreds of millions of dollars …
- 3,487
3
votes
When a stock market crashes, how does money just disappear?
The assessed value of the stocks goes down.
Non-stock related example: If my prized family portrait is assessed at 1000 dollars, and is later reassessed at 250 dollars. That value is lost, 1000-250= …
- 3,487
4
votes
How can the stock market keep growing indefinitely?
The total value of assets can exceed the total amount of cash or money in accounts.
For example, suppose we live in an economy with exactly as much money as assets (say, 100 trillion). I then produce …
- 3,487