Why can t you make money

Curious Kids: why don’t poorer countries just print more money?

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Curious Kids why can t you make money a series for children of all ages, where The Conversation asks experts to answer questions from kids. All questions are welcome: find out how to enter at the bottom of this article.

When a whole country tries to get richer by printing more money, it rarely works.

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Because if everyone has more money, prices go up instead. And people find they need more and more money to buy the same amount of goods. This happened recently in Zimbabwe, in Africa, and in Venezuela, in South America, when these countries printed more money to try to make their economies grow. Imagine, a sweet which cost one Zimbabwe dollar before the inflation would have cost m Zimbabwean dollars a year later.

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This amount of paper would probably be worth more than the banknotes printed on it. Have you ever seen so much money? Rising prices To get richer, a country has to make and sell more things — whether goods or services.

This makes it safe to print more money, so that people can buy those extra things. If a country prints more money without making more things, then prices just go up.

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  • Curious Kids: why don’t poorer countries just print more money?
  • Comment Synopsis Investors often get trapped into complex and enticing financial investments, which only profit those who create and sell them.
  • Why can't we just print more money, since it really isn't representative of anything of value?
  • These aren't normal times.
  • Two hundred and fifty million people in the wealthiest country on the planet are barely making it.

For example, think of those special vintage Star Wars toys from the s, which can be worth a lot of money. No one is making any more of these models.

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The sellers will just put the price up. This is because most of the valuable things that countries around the world buy and sell to one another, including gold and oil, are priced in US dollars.

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So, if the US wants to buy more things, it really can just print more dollars. Though if it printed too many, the price of those things in token client would still go up. Too much, too fast Of course, poorer counties can only print their own currency, not US dollars.

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And if they print a lot more, their prices will go up too fast, and people will stop using that money. Instead, people will swap goods for other goods, or ask to be paid in US dollars instead.

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Venezuela tried to protect its people from hyperinflation by passing laws to keep a low price on things people need most, like food and medicines. But that just meant that the shops and pharmacies ran out of those things.

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Empty shelves in a Venezuelan supermarket. In this case, printing more money lets people spend more, which lets companies produce more, so there are more things to buy as well as more money to buy them with.

Rising prices

Luckily, most countries have central banks, which help to run the other banks, and they printed extra money to get their economies moving again. Too little money makes prices fall, which is bad. Hello, curious kids! Ask an adult to send your question to us.

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