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If you create unlimited amounts of money without an equivalent number of goods being manufactured, you land up with money that is essentially worthless.

To draw an analogy, if I consistently produce 10 dolls every month, and initially I print out $10, it means each doll has a worth of $1. If I continue to produce 10 dolls each month, but the government now prints out $30, it means each doll is now $3. If I further decide that the country needs more money, and so I print $90, there are still only 10 dolls in existence, and so each doll is now worth $9.

I do not understand how printing more money solves the problem. It only works if the goods manufactured are equivalent to the amount of money printed.

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