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53 votes

Is money we make completely taken away by taxes?

No, this will not happen. Government does not tax people just for 'shits and giggles'. Governments do not hoard money at some pile as a some sort of dragon from a fantasy novel. Taxes are levied so ...
1muflon1's user avatar
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44 votes
Accepted

If no one knew about inflation, would inflation take place?

In this case, I think it is best explained without any economics jargon. If your thought experiment is taken to the extreme and no one knows about the money, it would literally imply that the money ...
AKdemy's user avatar
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41 votes

People pathologically hoard so much cash that they impoverish the entire nation

But when people pathologically hoard so much cash that they impoverish the entire nation This sentence seems to imply that we should fault the rich not because they are rich, but because they do ...
Alecos Papadopoulos's user avatar
34 votes

Why do different countries have different currency?

Two reasons: history and ability to control the money supply. History: paper-money started by being issued by trustworthy agents from kings/governments, as a way to be able to transfer the ownership ...
JoaoBotelho's user avatar
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31 votes
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Why do different countries have different currency?

I will focus on some economics reasons not mentioned explicitly so far. There are economic benefits to having your own currency. Your question essentially raises the question of so-called "Optimum ...
BB King's user avatar
  • 6,158
23 votes

If no one knew about inflation, would inflation take place?

Yes and there is a real-world historical example. Inflation is the term given to a natural phenomena where an overabundance of resources in human societies leads to the devaluation of such a resource ...
slebetman's user avatar
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21 votes
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Why is bartering uncommon in modern countries?

The main likely reasons why barter is not more common are: The inconvenience of having to find another party who both offers what you want and wants what you offer. Even if such a party can be ...
Adam Bailey's user avatar
  • 8,489
21 votes

In today's money, what was the value of a 1492 Spanish maravedí?

dtcm840's answer is about as good as you're going to do for a single actual number: it is clear, well-sourced, and almost certainly misleading. That's not their fault: all comparisons over time ...
Tiercelet's user avatar
  • 371
19 votes

Is money we make completely taken away by taxes?

Wind the clock back in the other direction: where did this money come from in the first place? The government issued it. Render unto Caesar that which is Caesar's, etc. You've also chosen to stop your ...
pjc50's user avatar
  • 558
16 votes

What is money really?

Money is, in essence, debt. More broadly, it's a system of clearing and credit. That entry in the computer means that the bank owes you \$1000, which is worth whatever others are willing to exchange ...
dismalscience's user avatar
16 votes

Why is bartering uncommon in modern countries?

In the countries that I am familiar with (such as Canada), using barter to avoid taxes is definitely illegal. You are required to report the dollar value of the exchange as revenue. It is treated as ...
Brian Romanchuk's user avatar
14 votes

People pathologically hoard so much cash that they impoverish the entire nation

Her position isn't quite untrue. If you define poor and rich relatively, you cannot have "poor" without having "rich." However, this has little to do with hoarding. We often think of money in terms ...
Cort Ammon's user avatar
13 votes

Why do different countries have different currency?

There are also many countries without their own currency. For example, Ecuador and Panama both use the US dollar as their official currency. See this list for more examples. There are several reasons ...
luchonacho's user avatar
  • 8,591
11 votes

Is money capital?

"...capitalists buy and sell money as though it were a productive economic good." No they don't. They buy and sell currency, because the price of currency fluctuates (due to imagination and/or ...
Alecos Papadopoulos's user avatar
11 votes

People pathologically hoard so much cash that they impoverish the entire nation

The argument is largely based of the following premise: You have 10 Million Dollars. Say in one case you gave it all to 1 already rich millionaire, and in the other case you gave $1000 to 10,000 poor ...
SGR's user avatar
  • 219
10 votes
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The Printing of Money for Paying Debt

Printing money causes inflation because someone (or some institution) will get the money and will spend it somehow. This increases demand for goods, but the number of goods, the supply was not ...
Giskard's user avatar
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10 votes

Why do different countries have different currency?

You might also want to think about If it's not divided then we can easily use the money anywhere. Is that positive and desirable for everyone in all situations? If you want to control the flow of ...
Chieron's user avatar
  • 201
9 votes

People pathologically hoard so much cash that they impoverish the entire nation

This particular statement posted is actually two separate statements that are being conflated despite not being related: Statement 1: People who collect many newspapers or cats are called "nuts&...
mkingsbu's user avatar
  • 191
9 votes

Can inflation occur in a positive-sum game currency system such as the Stack Exchange reputation system?

No, there is no inflation. Inflation is caused by a relative increase in the amount of currency, relative to the amount of scarce goods and services available. As you note, there is a continuous ...
410 gone's user avatar
  • 8,168
9 votes

Can inflation occur in a positive-sum game currency system such as the Stack Exchange reputation system?

Yes, there is inflation. StackExchange was created in 2008. Anybody who had 5,000 (arbitrary value) reputation points in 2009 would have been perceived as an outstanding member. Now, having ...
Frank from Frankfurt's user avatar
9 votes
Accepted

Why are the financial intermediation theory of banking or fractional reserve theory of banking still accepted despite evidence to the contrary?

There are several reason for it. Please note the reasons are not necessarily listed in order of importance, the last point is actually most relevant answer to your question. The 'Evidence' You Cite ...
1muflon1's user avatar
  • 56.7k
9 votes

Is money we make completely taken away by taxes?

Your calculation is fundamentally wrong because you are forgetting an important factor - the money that government spends. In your calculation you seem to think that the 10% the government takes in ...
DJClayworth's user avatar
8 votes

Why is the money supply perfectly inelastic?

The Fed controls the nominal money supply as they are the only ones who can add or remove money from the economy by printing it. Real money supply is only affected by increases or decreases in ...
TheSaint321's user avatar
8 votes
Accepted

Would a fair distribution of wealth from the super rich increase the purchasing power/life quality of the average person?

tl;dr: In the hypothetical you set in the body of your question redistribution cannot help the poor. However, this is not because redistribution could not significantly raise the welfare of the poor ...
1muflon1's user avatar
  • 56.7k
7 votes

Why doesn't Nintendo fire up the old factories and re-produce *exact* copies of many of their most popular games, controllers and consoles?

I am unsure whether this qualifies as economics, but it would be something that might be discussed in business school. Furthermore, the answer is almost entirely engineering. As such, I will do this ...
Brian Romanchuk's user avatar
7 votes

How can the stock market keep growing indefinitely?

As mentioned in the other answer, the amount of money does not have to correspond to the total value of all assets in the economy. However, there is some correspondence that is not mentioned in the ...
1muflon1's user avatar
  • 56.7k
7 votes
Accepted

Was there any currency backed by other metals than gold, silver or copper?

Spartan iron coins. Roman bronze coins: Aes Grave Chinese bronze coins: Ban liang (one type was bronze, not all) A non-metal "currency" backed by various industrial metals: the ...
Giskard's user avatar
  • 29.2k
6 votes

What percentage of a bank's deposits are lent out?

To see how much a bank lends in comparison to deposits, you can look at what is called the loan-to-deposit (LTD)ratio of banks in their annual reports. Usually it is between 60% and 90% but as you ...
Alexis L.'s user avatar
  • 593

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