<p>It causes unemployment to increase. Policy makers usually have to make a choice between inflation and unemployment. More money means inflation and less money means less investment, less job and more unemployment. If money becomes valuable then people will prefer to keep it in bank instead of creating jobs.</p>

CC BY-SA 3.0
2016-10-21T06:45:01.320Z
So it means the Inflation will rise, the people will not borrow more because its high, they will not spend more because the products price is expensive, the company will terminate their employee because of the low economy?
Onel Sarmiento
CC BY-SA 3.0
2016-10-21T06:45:38.583Z
I thought the Inflation will only rise when the government make more money?
Onel Sarmiento
CC BY-SA 3.0
2016-10-21T02:23:34.513Z
2016-10-21T02:23:34.513Z
user10321
<p>It's a very interesting question. Governments could actually create more money, but if there is no more real value in the economy, then it will simply mean that you will have to trade more cash for 1 unit of real value. This means that the general price level in the economy will increase. Of course, if you are the person to whom the debt paid off with that additional money is owed, you'll notice that the money you get back is not worth that much any more so you'll be looking for more interest. </p>

<p>Of course, this works in the other direction as well. If there is less money in the economy, you'll have to trade less cash to get the real value you are looking for. And if you notice that a TV-set costs 500 today, and only 480 tomorrow, and 460 the day after, you'll start postponing investments. This will have the effect that there will be less demand for those products, companies will have redundant capacities, which they will try to get rid off, e.g. by laying off people. This leads to a further decline in demand for goods as those people won't have the money to pay for it.</p>

CC BY-SA 3.0
2016-10-21T12:21:50.213Z
2016-10-21T12:21:50.213Z
Gabor
<p>I already post this question in <a href="https://money.stackexchange.com/questions/71899/what-will-happen-if-government-not-print-money">Money.SE</a>, but I need to transfer the question in to this site because it's off-topic...</p>

<p>As I said in my previews post.</p>

<p>I start researching the reason why the government can't print more money to resolve its dept and I found this answer 
<a href="https://www.quora.com/Why-cant-the-government-just-print-more-money-to-resolve-its-debts" rel="nofollow noreferrer">"Why can't the government just print more money to resolve its debts?"</a>.</p>

<p>Its says the reason why the government can't just print more money to resolve its dept is the inflation... "The more money printed, the lower its value".</p>

<p>Then another question popup in my mind. What if the government not print money anymore? Does the value of money increase?</p>

CC BY-SA 3.0
2016-10-21T09:56:29.207Z
I suspect you are assuming that it is the government that creates our money... whereas, contrary to popular belief, it is private banks that create the vast majority of the money in an economy - look up "fractional reserve banking".
Mick
<money-supply>
What will happen if the government not print money?
Onel Sarmiento
# What will happen if the government not print money?

(Asked by: username_0 on 2016-10-21)

I already post this question in [Money.SE](https://money.stackexchange.com/questions/71899/what-will-happen-if-government-not-print-money), but I need to transfer the question in to this site because it's off-topic...

As I said in my previews post.

I start researching the reason why the government can't print more money to resolve its dept and I found this answer
["Why can't the government just print more money to resolve its debts?"](https://www.quora.com/Why-cant-the-government-just-print-more-money-to-resolve-its-debts).

Its says the reason why the government can't just print more money to resolve its dept is the inflation... "The more money printed, the lower its value".

Then another question popup in my mind. What if the government not print money anymore? Does the value of money increase?

**Tags:** money-supply

> **Comments:**
> **username_1**: I suspect you are assuming that it is the government that creates our money... whereas, contrary to popular belief, it is private banks that create the vast majority of the money in an economy - look up "fractional reserve banking".  

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## 2 answers

### Answer by username_2 on 2016-10-21. Score: 1

It causes unemployment to increase. Policy makers usually have to make a choice between inflation and unemployment. More money means inflation and less money means less investment, less job and more unemployment. If money becomes valuable then people will prefer to keep it in bank instead of creating jobs.

> **Comments:**
> **username_0**: So it means the Inflation will rise, the people will not borrow more because its high, they will not spend more because the products price is expensive, the company will terminate their employee because of the low economy?  
> **username_0**: I thought the Inflation will only rise when the government make more money?  

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### Answer by username_3 on 2016-10-21. Score: 1

It's a very interesting question. Governments could actually create more money, but if there is no more real value in the economy, then it will simply mean that you will have to trade more cash for 1 unit of real value. This means that the general price level in the economy will increase. Of course, if you are the person to whom the debt paid off with that additional money is owed, you'll notice that the money you get back is not worth that much any more so you'll be looking for more interest.

Of course, this works in the other direction as well. If there is less money in the economy, you'll have to trade less cash to get the real value you are looking for. And if you notice that a TV-set costs 500 today, and only 480 tomorrow, and 460 the day after, you'll start postponing investments. This will have the effect that there will be less demand for those products, companies will have redundant capacities, which they will try to get rid off, e.g. by laying off people. This leads to a further decline in demand for goods as those people won't have the money to pay for it.


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