Need an economics specialist for this one.?

[John H]

If a pound or dollar or whatever used to go so much further years ago because there was so much less money around. How is there more money around now? It wouldn't make sense for a country to just print themselves more money as this would cripple their economy (as has happened in zimbabwe) I've asked loads of people but noone can answer me, not even economics students!

[hugh h]

Too much money chasing too few goods is the definition of inflation. The rising of prises is the result.
In the case of Zimbabwe it may have been both a drop in productivity of goods and more money supply.
Politicians don't always do what's best for the economy, they are short term oriented and do whatever it takes to keep themselves in power.

[Kui Jai]

There are many influencing factors. You need to go back to basic, supply and demand.
In the old days when the population was much much smaller and life was simpler, material demand was low. The serfs under the feudal system got by with what was provided by their masters. Since industrial revolution, the economy of scale kicked in and things could be produced in mass qualtity at lower costs. People's mentality followed to change. Keeping up with the Joneses makes them feel that they are moving up the social scale. They are getting away from serfdom and their own home is their castle instead of serving and living under their master's castle. The society grew and so did the economy.
When commodity is scarce and the demand is high, you get inflation and worse still a runaway inflation. When a country's political climate is in turmoil or in a war situation, you have confetti money.
People can write a book on this subject. I am just giving the very gist of it here. Perhaps your tutor will give you a far better answer.

[Gavin]

How is there more money around now?

Cos there's more stuff to buy, so demand for money is greater, so supply of money is greater to meet demand.

[Gavin]

How is there more money around now?

Cos there's more stuff to buy, so demand for money is greater, so supply of money is greater to meet demand.

[guss99]

Money today is more of an abstraction. When two major corporations make deals, no actual currency changes hands. The company buying has its account debited , while the company making the sale has one of its accounts credited by the amount of the sale. This transaction is just an electronic transaction. M1 money is actual cash. I can not remember each level of the money supply. If a country increases its money supply to much then its currency loses value. But most of the money supply is only 1s and 0s on computers.

[guss99]

Money today is more of an abstraction. When two major corporations make deals, no actual currency changes hands. The company buying has its account debited , while the company making the sale has one of its accounts credited by the amount of the sale. This transaction is just an electronic transaction. M1 money is actual cash. I can not remember each level of the money supply. If a country increases its money supply to much then its currency loses value. But most of the money supply is only 1s and 0s on computers.