economists believe that production possibilities frontiers are often bowed because we are all part of an infinite supply of money.
Economists believe that we are all part of an infinite supply of money, but we’re not just using it for all our purchases. People, places, and things are also using money to help make things, or to buy things, or to pay for the things we used money for. In a sense, each of us is a part of an infinite supply of money.
In a sense, it’s true that money is a finite resource. As everyone knows, all of our possessions are finite, but it doesn’t mean we need to economize on them. It’s also true that people, places, and things are not only using money to make things, but for all sorts of other things. But that means we can’t just keep using all of our money and expect to end up with a world with zero inflation.
Economists see inflation as a result of demand or scarcity. They believe that as money expands in supply, people and businesses find it more and more useful as a medium to exchange value while demand goes up. This way people and businesses can buy stuff they need and don’t necessarily want that is not in their immediate reach.
Economists seem to think that we should go back to the gold standard because it worked out for the past 100 years or so. And in order to get there, you have to pay the price first. As a result of all of this, they believe that inflation is unavoidable. This is because if people and businesses are forced to buy things they dont need and dont want, then companies and businesses will produce more and more stuff.
Well, I wouldn’t say “forced to” as forced to would mean they dont have the money to buy it. And if they do have the money, they are forced to make more and more money to pay for it. But it’s also possible they could get the money to buy it. And the point is, we should not expect that we will ever get the price for stuff back to the gold standard.
Some economists argue that this is exactly what is happening. In other words, the whole idea behind the back-to-gold standard is that people and businesses will buy ever more stuff and make more and more money and then we will go back to the gold standard. This is what economists call a “production inflation.” When people and businesses buy more stuff, they make more money. But because they spend more money, they make lower prices for the stuff they buy.
Inflation is great for a lot of things, but it is especially great for the production of things. The reason is that the demand for one thing increases the price of another one by the same amount, so the price of the first thing goes down. But by making more of the first thing, we make it less valuable in the system. Inflation is like paying for a new car and then going back to paying the original amount.