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| 11 Sep 2011 10:14 AM |
Here is an example.
Person A has ten dollars.
Company A has 100 dollars
Government A has 1000 dollars.
total sum of 1110 dollars.
Person A works for the company producing 10 goods, for which the company pays the person 10 dollars of which 2 is taxed to the Government, then Person A purchases 1 product for the price of 2 dollars. This goes on for 10 days after which the situation is
Person A has 70 dollars and ten goods
Company A has 40 dollars + 99 goods (value of 198 dollars)
Government has 1020 dollars
Then the government decides to purchase 99 goods for the price of 198 dollars.
Person A has 70 bucks.
Company A has 238 bucks.
Government has 822 bucks + 99 goods which value is 198 dollars.
Now this goes on for 100 days, with every tenth day the government making the purchase
Person A has 670 dollars and 210 goods
Company A has 1200
Government has -958 dollars (lolfail) and 1980 goods.
And now the total value amount of money and value of goods is 5512 dollars, this is five times the amount of money than what was in the start. Why is this?
This example is flawed because it has no material prices et cetera but still i hope you get the idea. |
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Avogadro
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| 11 Sep 2011 10:18 AM |
| AKA why does the amount of money + value of goods rise? As the goods dont lose their value and they are exchanged for money the amount of money rises. This is some sort of applicable to real world. |
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Avogadro
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| 11 Sep 2011 10:23 AM |
| So the amount of money + value of goods constantly raises? Doesnt it cause horrific problems? |
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Avogadro
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Avogadro
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werton34
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| 11 Sep 2011 11:58 AM |
| And don't print too much without gold to back it up or else inflation happens |
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Avogadro
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werton34
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